Major economies are helping to increase IMF resources by $ 650 billion

Washington (AP) —Wednesday, financial officials in the world’s major economies use the International Monetary Fund’s resources as a way to provide more support to vulnerable countries struggling to cope with the global epidemic. Agreed on a proposal to increase $ 650 billion.

A group of 20 major industrialized countries issued a joint statement, as well as the final six-month moratorium approval of debt repayment by the 73 poorest countries in the world.

The proposal to increase the IMF’s resources was boosted earlier this year with the support of the Biden administration. These resources, known as IMF Special Drawing Rights, create assets that countries can use to strengthen their reserves.

This proposal requires approval from the IMF’s Board of Directors and donations from Member States.

The debt repayment agreement extends the moratorium launched last year to the end of this year. However, the International Assistance Group has expressed dissatisfaction with saying that the G20 will be the last to be offered an extension.

Eric Reconte, Executive Director of Jubilee USA Network, said: “It is unlikely that the debtor will have enough breathing space for this extension.”

The G20 Group also supported the driving force of the Biden administration, Global minimum tax rate for companiesHe said he hopes to reach a consensus within the group by the middle of this year.

US Treasury Secretary Janet Yellen said in a speech Monday that countries need to stop “race to the bottom”, which has reduced corporate tax rates to attract multinational corporations, to adopt a minimum corporate tax for each country. Prompted. ..

The Biden administration is proposing to raise the US corporate tax rate to 28% from the current 21%, which was reduced by the Trump administration’s tax cut bill approved in 2017. Before the reduction, the US corporate tax rate was 35%. The government wants to use additional corporate tax revenues to fund increased spending on infrastructure.

Italy’s Treasury Minister Daniele Franco, chair of the G20 financial group, told the group that Yellen told the group that the Biden administration’s proposal was in line with multinational efforts to agree on a minimum tax rate.

Yellen and Federal Reserve Board of Governance Chairman Jerome Powell represented the United States this week in a virtual conference prior to the virtual conference of the IMF and its sister lender, the World Bank.

On Tuesday, the IMF The latest economic forecast that boosted global growth to 6% this year, Increased from the January 5.5% forecast. This is due to the accelerated deployment of vaccines and the $ 1.9 trillion bailout package promoted by the Biden administration in Congress last month.

IMF Managing Director Cristalina Georgieva told reporters Wednesday that the recession last year, the worst since World War II, would have been three times more serious without significant government support.

She said this year’s rebound is backed by the world’s two largest economies, the United States and China, but the fate of the economy is “dangerously diverging” and the poor are lagging behind. It was.

“A few countries led by the United States and China are moving forward,” she said. “Weak economies are lagging behind.”

On trade, the G20 Joint Communiqué said, “Recalling our commitment to combat protected trade principles and encouraging feared efforts to reform the World Trade Organization.”

During the Trump administration, the G20 dropped words from its communiqué, which pledged to resist the move to build protected trade barriers.

Following a meeting of finance ministers and central bank governors of traditional economic powers such as the United States, Japan and Germany on Wednesday, and emerging economies such as China and India, a summit meeting will be held in Rome on October 30. 31.