Calls for debt relief for the world’s poorest countries

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An aerial view of BASECO Compound, the largest slum in Manila.

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More than 100 global organizations are calling for the debt payments of developing countries to be dropped this year.

These countries include the poorest economies in the world struggling with the effects of coronavirus.

Major charities, including Oxfam and ActionAid International, are asking for debt relief that would free up more than $ 25 billion (£ 20 billion) this year.

They have written to world leaders and the major central banks asking for a series of debt relief measures.

The call is led by the Jubilee Debt Campaign, a UK-based charity, and comes a day before the G20 group meeting of the world’s largest and fastest growing economies.

“Developing countries are hit by an unprecedented economic shock and are at the same time facing an urgent health emergency. The suspension of debt payments requested by the IMF and the World Bank saves money now, but gives a boost and actually avoids facing the problem of the debt spiral, “said Sarah- Jayne Clifton, Director of the Jubilee Debt Campaign.

Activists want debt payments to be canceled with immediate effect, including payments to private creditors. “This is the fastest way to keep money in the countries to be used to respond to Covid-19, and to ensure that public money is not wasted by boosting the profits of wealthy private speculators”, added Mrs. Clifton.

Calculations show that 69 of the world’s poorest countries are expected to pay $ 19.5 billion to other governments and multilateral institutions and $ 6 billion to external private lenders this year.

The IMF has released $ 50 billion in emergency funding while the World Bank has approved a $ 14 billion response plan for the most vulnerable economies.

Activists want the emergency cancellation to be followed by a process to bring debt down to a sustainable level after the virus crisis.

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