IMF Board Approves Debt Relief for 25 Countries to Combat COVID-19

IMF Board Approves Debt Relief for 25 Countries to Combat COVID-19

On April 13, the International Monetary Fund (IMF), one of the world’s largest financial institutions, approved immediate “debt service relief” for 25 member countries as part of its response to the impact of COVID-19. According to the IMF, the debt relief package is designed to “provide grants to… vulnerable members… over the next six months [to help countries prioritize] vital… relief efforts.”

Instructors, click the link below to download this week’s lecture for use in your classroom. The deck contains a writing prompt and a debate question as well as other assessment questions.

Download the PowerPoint Lecture Spark for IMF Board Approves Debt Relief for 25 Countries to Combat COVID-19

Links

“IMF Executive Board Approves Immediate Debt Relief for 25 Countries”
https://www.imf.org/en/News/Articles/2020/04/13/pr20151-imf-executive-board-approves-immediate-debt-relief-for-25-countries
 
“Half the world’s countries ask for IMF bailout”
https://www.theweek.co.uk/106658/half-the-world-s-countries-ask-for-imf-bailout
 
“COVID-19: Growth forecast at -3 per cent, as IMF offers debt relief to most vulnerable nations in Africa, Asia, Middle East and Caribbean”
https://news.un.org/en/story/2020/04/1061712

“Unprecedented number of countries seeking coronavirus aid from IMF”
https://www.msn.com/en-us/news/us/uprecedented-number-of-countries-seeking-coronavirus-aid-from-imf/ar-BB12NMZS
 
“IMF, World Bank urge debt relief for poor nations battling virus”
https://www.aljazeera.com/ajimpact/imf-world-bank-urge-debt-relief-poor-nations-battling-virus-200327233253010.html

“U.S. opposes massive liquidity IMF boost: Mnuchin”
https://www.reuters.com/article/us-imf-worldbank-usa/u-s-opposes-general-allocation-of-special-drawing-rights-to-imf-members-idUSKCN21Y1QU?il=0

“IMF has no experience of recession arriving with such ferocity”
https://www.theguardian.com/business/2020/apr/14/imf-has-no-experience-of-recession-arriving-with-such-ferocity

“Commercial creditors ‘must sign up to global debt-deal’ – or forgo COVID-19 Help”
https://www.theguardian.com/business/2020/apr/14/commercial-creditors-must-sign-up-to-global-debt-deal-or-forgo-covid-19-help

Assessment

  • Writing: Describe the history and core mission of the IMF. Is this current debt relief effort unprecedented in modern history? What are some of the conditions that are usually given to countries seeking out IMF loans / relief?
  • Debate: The IMF debt relief measures will effectively only delay the inevitable economic collapse by allowing countries to default on loan payments.
  • Poll: Will the IMF’s debt relief be enough to stem the economic impact of the coronavirus?
  • Short Answer: How much power and influence does the United States have over the IMF and its core mission?

Current events quiz:

1) According to the IMF how many countries will receive immediate debt relief?

a. 10
b. 15
c. 17 
d. 25

2) How much money in dollars will be set aside by the IMF to provide this debt relief?

a. $750 billion
b. $250 billion
c. $500 billion
d. $1 trillion

3) The United States accounts for approximately what percentage of the IMF’s executive board voting power?

a. 10%
b. 16%
c. 35%
d. 56%

4) The Catastrophe Containment and Relief Trust, which will help fund the IMF’s debt relief efforts, was originally established in 2012 during the MERS outbreak in the Middle East. (T/F)

5) The IMF does not typically impose strict repayment terms and domestic policy conditions on countries seeking loans or bailouts (T/F)

6) Since the IMF announcement to provide debt relief, half of the world’s countries have approached the IMF asking for emergency assistance (T/F)

Answers:

1) D

2) C

3) B

4) False

5) False

6) True

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