THE head of the International Monetary Fund said today that rich countries had met a target of reallocating US$100 billion in funds from the institution to battle climate change and poverty in developing countries.

“We meet the target, we do have the US$100 billion,” Kristalina Georgieva told a roundtable discussion at a climate financing summit in Paris.

Ahead of the summit the IMF had still needed another US$40 billion to hit the target, she said.

The plan, first announced in 2019, was for wealthier countries to recycle US$100 billion in IMF special drawing rights (SDRs) for vulnerable economies.

SDRs are foreign exchange reserve assets awarded to countries based on how much they contribute to the IMF.

The idea, which some European countries resisted, was for wealthier countries to lend these foreign exchange reserve assets to the IMF, which could in turn lend them to developing economies.

Ahead of the summit, France and Japan announced that they would redeploy 30% of their SDRs for this purpose.

Georgieva was speaking at the Summit for a New Global Financial Pact organised by France, which aims to find financial solutions to help tackle the problems of poverty and climate change.

French leader Emmanuel Macron said in his opening remarks that the IMF and partner organisation the World Bank were “not completely suited” to the world’s current challenges. 

Veteran president of Congo, Denis Sassou-Nguesso, highlighted how pledges from rich countries to help vulnerable countries had failed to materialise, including a promise to provide US$100 billion a year at a COP climate summit in Copenhagen in 2019. 

“Every time there’s a COP meeting we make the same announcements. In Copenhagen, it was announced that there would be US$100 billion per year for poor countries, but we never saw it. It didn’t reach us,” he told an audience. – AFP, June 22, 2023.