“We could decide to extend the initiative by a few months or we could already decide to start a new phase which could involve a deeper restructuring of the debt of certain countries on a case-by-case basis and in a multilateral framework. “
So far, 41 countries have requested debt service relief under the suspension of payments agreement, and the Paris Club has signed agreements with 20 countries, from Côte d’Ivoire to Ethiopia and Pakistan.
The Debt Service Suspension Initiative (DSSI), as it is officially called, will free up $ 12 billion that countries can use to deal with the health and economic strains caused by the coronavirus, according to Bank data. world.
World Bank President David Malpass told the conference that freezing debt payments would not be enough for some heavily indebted countries that need permanent debt service cuts.
This initiative is also unique in that it brings China to the negotiating table because it has become a major creditor in recent years and has been the subject of frequent criticism for its lack of transparency on its loans.