RIYADH: The Group of 20 nations, representing the world’s biggest economies, have agreed to extend the suspension of debt payments by an additional six months to support the most vulnerable countries in their fight against the coronavirus pandemic.
The G-20 said the extension will provide ongoing relief for the $14 billion in debt payments that would be due at the end of the year. The decision gives developing nations until the end of June 2021 to focus spending on healthcare and emergency stimulus programs rather than debt repayments.
The G-20 announcement was made initially on Twitter during a meeting of the group’s finance ministers and central bank governors and later confirmed at a news conference. The virtual discussions are being held at the start of this week’s meetings of the International Monetary Fund and the World Bank.
International aid groups expressed disappointment that more debt relief isn’t being provided by extending the moratorium on debt payments for a full year or by forgiving part of the debt rather than merely suspending payments.
G20 officials argued that the relief that is being provided is helping 46 of the 73 countries eligible, with efforts underway to expand. Some critics have also complained that China objected to portions of the debt relief plans that have been advanced.
Finance minister of Saudi Arabia Mohammed al-Jadaan, this year’s chair of the G-20, acknowledged at a news conference that they still need to do more. “We must ensure these nations are fully supported in their efforts to tackle the COVID-19 pandemic. We have agreed to extend the debt service suspension initiative by six months,” he said.
Al-Jadaan said there will be further discussions during April’s meetings to decide whether the suspension should be extended for an additional six months. He stressed that the pandemic has threatened the fiscal stability of many countries.
He said another virtual finance ministers’ meeting was planned for next month before the annual summit on 21-22nd November to agree on a framework that goes beyond even the current debt suspension initiative.
Transparency International, Amnesty International and a collective of groups called CIVICUS had written to the G-20 finance ministers ahead of their meeting to warn that the world is facing a crisis unlike any in the last century and that debt suspension is only a first step.
The groups urged the G-20 nations to suspend debt payments at least through 2021, saying many of the poorest countries are still spending more on debt payments than on life-saving public services.
Oxfam and other groups are also calling on private lenders and investment funds to make similar concessions for the poorest countries by suspending their debt repayments. The G-20, in a final communique, also urged private lenders to join its initiative for debt suspension.
