Responding to – and recovering from – the shock of the pandemic requires enhanced capacity to diagnose fragilities, identify resources and design appropriate policy responses. Toward these aims, this policy briefing highlights 2 tools – the Global Financial Safety Net and the Sustainable Development Finance Assessment, both outputs of the DA-Project, which provide more information on short-and long-term financial alternatives for developing countries. In this context, the role that a new SDR allocation can play is also explored.
There is no simple or single panacea to expanding fiscal space, and developing countries will need to employ a wide range of policies to return to a sustainable development path and achieve the 2030 Agenda, supported by an international community willing to address the inherent asymmetries of the international monetary and financial system, of which the SDRs are a useful, but insufficient part.