The International Monetary Fund plans to mobilise $45bn (£34bn) of funding to help countries deal with long-term challenges such as Climate Change.
The IMF’s executive board is today expected to approve plans to launch a Resilience and Sustainability Trust (RST) to assist a broad range of its 190 member states to tackle long term challenges, Reuters first reported.
The fund could be the West’s answer to the China-led Belt and Road initiative, a global development scheme pouring hundreds of billions of dollars into long-term infrastructure projects abroad.
“Today, even as IMF member countries confront the immediate challenges of rising inflation, constrained fiscal space and pandemic recovery — heightened by risks associated with the war in Ukraine — they are also calling on the Fund to help respond to longer-term challenges such as climate change and pandemic preparedness,” papers seen by Reuters said.
While the IMF currently offers low-cost and zero-interest rate funding to help countries tackle short term challenges such as inflation or capital flight, it does not support countries with long term threats.
The funding could help the IMF curry favour with low-income and vulnerable middle-income companies which have been hit particularly hard by the pandemic and inflation.
The IMF, which expects the fund to begin lending by October, will also set up policy-coordination arrangements with Rwanda and Senegal, that do not qualify for funding. Senegal and Rwanda have both received infrastructure funding from China under the One Belt One Road initiative.