The International Monetary Fund should provide the Democratic Republic of Congo with debt relief amid the Ebola outbreak and urgently replenish the fund that assists disaster-hit countries. This view was expressed by Marina Zucker-Marques, a senior researcher at Boston University’s Global Development Policy Center, in a column published by The Japan Times.
The fund lacks resources
The column states that as of mid-August, more than 2,300 deaths had been confirmed in the DRC. According to an estimate by the UN Development Programme, the outbreak could push nearly 1 million people into poverty.
According to the author, the DRC has more than $3 billion in outstanding debt to the IMF. At the same time, the available resources of the Catastrophe Containment and Relief Trust (CCRT) amount to $120 million, while in 2027 the country is due to pay the IMF nearly $300 million in debt servicing.
Zucker-Marques recalled that the CCRT was created in 2014 through the transformation of the Post-Catastrophe Debt Relief Trust. A mechanism for responding to public health crises was added to its mandate after the Ebola epidemic in Guinea, Liberia, and Sierra Leone. During the COVID-19 pandemic, the fund nearly exhausted its resources.
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Gold proposal
The author proposes selling 10% of the IMF’s gold reserves and directing the proceeds to a permanent dedicated fund. According to the data she cites, the IMF holds approximately 90.5 million troy ounces of gold, recorded at the historical price of $45 per ounce.
At a market price of about $4,000 per ounce, the unrealized gain from these reserves amounts to approximately $355 billion, according to Zucker-Marques’s calculations. The sale of one-tenth of the gold could create a fund worth $35.8 billion. With an annual return of 3%, it could, in the author’s view, generate more than $1 billion each year for the CCRT and other IMF concessional lending mechanisms.
Gold sales require the support of 85% of IMF member votes, making U.S. consent important, the author noted. She also called for an immediate donor campaign to replenish the CCRT.
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