Freeland’s post-pandemic Pearson moment

This year’s G20 meeting made headlines because of new commitments to correct the imbalance in global vaccine distribution. It is astonishing that more people in wealthy countries have received third doses or boosters of the vaccine than the number of people who received first doses in all low-income countries. So, it was great news that Canada took an important step last weekend to correct this inequity with a new promise to share 10 million more doses, although the key will be to deliver these rapidly. But that’s not the most important development for the world’s most vulnerable that came out of the summit, held at the end of October. In August, the International Monetary Fund issued unprecedented emergency financial support of US$650-billion dollars to help all countries face the numerous challenges posed by the pandemic. These windfall assets, called Special Drawing Rights (SDRs), can be used to bolster a country’s international reserves or can be exchanged for real currency to buy goods like vaccines, emergency food supplies, or personal protective equipment. The problem is that for low-income countries, there are too few SDRs because IMF rules dictate that they be allocated based on the size of the recipient country’s economy. As a result, all low-income countries combined received $26-billion, barely more than what Canada alone received ($19-billion). Stuart Hickox is the Canada director for Bono’s anti-poverty organization. ONE is a global movement campaigning to end extreme poverty and preventable disease. Photograph courtesy of Mr. Hickox So, the big news you didn’t hear from the G20 summit was that Canada has agreed to lend 20 per cent of its SDRs to help more vulnerable countries, or $3.7-billion. To put this amount in perspective, suffice it to say that it exceeds the gross national product of Burundi, Liberia, Central African Republic, or South Sudan. This redirection of emergency funds is a historic gesture that could be a game-changer as low-income countries struggle to emerge from the bruising impacts the pandemic has had on their efforts to end hunger, disease and extreme poverty. Paradoxically, Canada was not going to use SDRs here at home. Our international reserves were already well stocked, nearly double what is required by law. With widespread vaccination and generous fiscal support, Canada is, like most other wealthy countries, poised to bounce back quickly. So, it’s smart to redirect SDRs to where they are needed most. It’s also in our economic self-interest to do so, and it’s not tax-payers money that is being redirected. Win-win. We applaud Deputy Prime Minister and Finance Minister Chrystia Freeland’s commitment. What will make the difference now is how this vision and leadership are implemented: will these redirected resources be strategically designed for maximum impact? Will they be followed by expeditious action? Someone needs to lead on answering these questions, and it should be Freeland. Canada still has $15-billion in SDRs it could transfer—which would represent the biggest single financial contribution Canada has made to global peace, food security, and economic growth since the end of the Second World War. It’s a moment Canada should seize, much like in 1969 when former prime minister Lester B. Pearson set the standard for how much of gross national income wealthy countries should dedicate to enabling and supporting low-income countries. Chris Dendys is executive director of RESULTS, which advances solutions to end extreme poverty and achieve our goals through advocacy. Photograph courtesy of Ms. Dendys Freeland has an opportunity to transform Canada’s relationship with the developing world, laying the foundation for new trade and strategic partnerships for decades to come. But success will depend on the conditions and influence Canada applies to determining how this transfer of SDRs is managed. She should use her voice to ensure that SDRs do not contribute to unsustainable indebtedness. Where possible, SDRs should be transferred as grants or interest-free loans. Freeland has already taken an important step in this direction by pledging $107-million, which will more than cover the interest costs on the initial SDR transfers. SDR transfers must also have a long repayment and grace period so the recipient countries have time to recover economically before making payments. They must be made available through a transparent and accountable mechanism that ensures they are directed to critical needs such strengthening health systems, food security, and to a green economic recovery. Healthy, secure, and prosperous countries can become great trading partners, therefore generating a measurable return on investment for Canada. The pandemic revealed a vast inequality between developed and developing countries. Wealthy countries are scrambling to make up for a failed effort to ensure fair and equitable vaccines distribution. But on SDRs, Canada can be a leader. And Freeland can boldly secure Canada’s position as a champion for healing and economic recovery in the developing world by continuing to push others to transfer these historic resources and to determine how they are managed and used. This can become her Pearson Moment. Stuart Hickox is the Canada director for Bono’s anti-poverty organization. ONE is a global movement campaigning to end extreme poverty and preventable disease. Chris Dendys is executive director of RESULTS, which advances solutions to end extreme poverty and achieve our goals through advocacy. The Hill Times

Freeland’s post-pandemic Pearson moment

Canada still has $15-billion in Special Drawing Rights it could transfer to countries in need—which would represent the biggest single financial contribution Canada has made to global peace, food security, and economic growth since the end of the Second World War.

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Freeland’s post-pandemic Pearson moment

Canada still has $15-billion in Special Drawing Rights it could transfer to countries in need—which would represent the biggest single financial contribution Canada has made to global peace, food security, and economic growth since the end of the Second World War.

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