Morrison & Foerster’s pro bono team, together with pro bono teams from several other global law firms, advised the ONE Campaign, a global movement campaigning to end extreme poverty and preventable disease by 2030, on the laws regulating the use and treatment of Special Drawing Rights (SDRs) in nine G20 countries.
In August, the International Monetary Fund (IMF) announced the largest allocation of SDRs in history (worth about $650 billion) to help countries that need more resources to fight the COVID-19 pandemic, which has disproportionately affected the poorest countries in the world, reversing two decades of progress in the reduction of extreme poverty worldwide. SDRs, which are interest-bearing international reserve assets, were first created by the IMF in 1969 to supplement other reserve assets of member countries, giving governments greater flexibility to use their foreign hard currency (especially dollars and euros) to import food or vaccines or to strengthen their public finances.
However, because the IMF’s rules require that reserve assets be allocated to member countries in accordance with their IMF share quotas, the bulk of these new reserve assets have been allocated to wealthy countries that hold a large share of IMF rather than to poorer member countries that could make prompt use of these assets to help address the effects of the pandemic on their societies. Only about 40% of the SDR allocation will go to emerging and developing countries, while low-income countries will receive just 3% of the total. The ONE Campaign is calling on wealthy countries to voluntarily share the majority of their SDRs with countries that need more resources to fight the pandemic.
The ONE Campaign relied on pro bono assistance through TrustLaw, the Thomson Reuters Foundation’s global pro bono network, for legal support to have a better understanding of the legal regulations governing SDRs in nine G20 countries that are members of the IMF and thus involved in the discussions related to the reallocation of SDRs. The findings from the pro bono legal research are now being used by the ONE Campaign in its policy, advocacy, and campaigning work.
The Morrison & Foerster team advising the ONE Campaign was led by New York finance partners David Kaufman and Barbara Mendelson, together with New York finance associate Jeff Xu, Washington, D.C. national security analyst Reema Shocair Ali, and summer associates Michaela Thornton and Yigal Adhami.