Covid 19: G20 countries postpone debt relief decisions until autumn meeting

After approving debt relief for the world’s poorest countries in April, G20 finance ministers announce that further decisions on debt suspension have been postponed until their autumn meetings.

By Fr. Benoît Mayaki, SJ

G20 finance ministers announced that decisions on further debt suspensions, permanent debt reductions and extension of debt relief for countries hit hard by the Covid-19 crisis have been left for meetings later this year.

They made the announcement in a statement following a virtual meeting of G20 finance ministers on the economic impacts of the global health crisis on Saturday.

In April, the G20 approved a debt service suspension initiative until the end of 2020 for 73 developing countries. By July, 42 countries had applied for the program, requesting the deferral of a cumulative debt of $5.3 billion.

Reacting to the latest developments, Jubilee USA Executive Director Eric LeCompte said he “had hoped that the suspension of debt payments for the world’s poorest countries would continue into 2021 given the severity of the crisis. “.

Calls for expanded debt suspension

Ahead of last Saturday’s meeting, Jubilee USA, an interfaith alliance of faith-based, development and advocacy organizations, sent a letter to G20 finance ministers calling for action in the face of the Covid-19 crisis.

The letter, signed by more than 200 organizations, recommended increased debt relief, more aid to developing countries, processes to fight corruption and the establishment of safeguards against markets and financial crises for more from developing countries.

Private sector creditors

The Account said that “G20 finance ministers have proposed stronger language on private sector participation in poor country debt relief initiatives.”

This is important, he notes, “because some private sector creditors are resisting the debt relief process.”

Scheduled meetings

The United Nations General Assembly meets in the fall. However, the next set of decisions on Covid-19 health and economic solutions are scheduled for October meetings of the International Monetary Fund (IMF) and World Bank, and November G20 meetings.

“The G20 wants to see more aid and financing options to consider from the IMF in the fall,” said Le Compte, adding that “this is a hint at access to global reserve funds or what are called special drawing rights”.

“Finance Ministers also re-emphasized their strong commitment to advancing global anti-corruption and anti-money laundering laws,” Le Compte said.

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