Special Drawing Rights and the Reform of the Global Reserve System

Policy Brief #3

Fundamental flaws in the current global reserve system have led to a massive build up of hard currency reserves that, in turn, have helped generate the global imbalances which cause deep systemic vulnerabilities. At the center of the unstable and unequal system is the capricious provision of the global reserve asset by a national entity coupled with the absence of an adequate collective insurance mechanism for states. The solution to the infirmities of the system, therefore, involves the collective provision of the global reserve asset by a global institution and the strengthening of collective insurance mechanisms. Reforming the IMF’s Special Drawing Rights (SDR) facility embodies both these features.

About the Author

José Antonio Ocampo
Professor of Professional Practice at Columbia University and former Minister of Finance of Colombia
Columbia University

Jose Antonio Ocampo is a Professor of Professional Practice in the School of International and Public Affairs and former Minister of Finance of Colombia. He is also a Fellow of the Committee on Global Thought at Columbia University. Prior to his appointment at Columbia, Professor Ocampo served as the United Nations Under-Secretary-General for Economic and Social Affairs, and head of UN Department of Economic and Social Affairs (DESA), as Executive Secretary of the UN Economic Commission for Latin America and the Caribbean (ECLAC), and has held a number of high-level posts in the Government of Colombia, including Minister of Finance and Public Credit, Director of the National Planning Department, and Minister of Agriculture . Professor Ocampo is author or editor of over 30 books and has published over 200 scholarly articles on macroeconomic theory and policy, international financial issues, economic development, international trade, and Colombian and Latin American economic history.