The G-20 announcement was initially made on Twitter at a meeting of the group’s finance ministers and central bank governors, and then confirmed at a press conference. The virtual talks are taking place at the start of this week’s meetings of the International Monetary Fund of 189 countries and the World Bank, which are also being conducted virtually due to the coronavirus pandemic.
International aid groups have expressed disappointment that debt relief is not provided by extending the moratorium on debt payments for a full year or by canceling part of the debt rather than simply suspending debt. payments.
“This pandemic has exposed a blatant and unfair double standard: the world’s richest countries abide by one set of rules, and the world’s poorest by another,” said David McNair, executive director of global policy at ONE, an international aid group.
G20 officials have argued that the aid being provided helps 46 of the 73 eligible countries, with efforts underway to expand.
Some critics also complained that China had opposed parts of the debt relief plans that had been put forward.
“It is unfortunate that the urgent need for broader debt relief for poor countries is thwarted by the apparent recalcitrance of China, which has become a major creditor,” said Eswar Prasad, professor of economics at the Cornell University and former Director of the IMF. China Division. “China has been reluctant to participate in multilateral debt relief efforts, putting narrow economic and geopolitical interests ahead of a collective approach to ease the burden on poor countries.”
“We still need to do more,” admitted Mohammed al-Jadaan, Saudi Arabia’s finance minister, chairman of the G-20 this year, at a press conference after Wednesday’s meeting. “We need to ensure that these countries are fully supported in their efforts to tackle the COVID-19 pandemic. … We have agreed to extend the debt service suspension initiative for six months. ”
Al-Jadaan said there would be further discussions during the April meetings to decide whether the suspension should be extended for another six months. He stressed that the pandemic had threatened the fiscal stability of many countries, especially the poorest.
Al-Jadaan said another virtual meeting of finance ministers is scheduled for next month, ahead of the leaders’ summit on November 21-22, and that it would aim to agree on a framework that goes beyond even the current one. debt suspension initiative. He didn’t elaborate.
Transparency International, Amnesty International and a group of groups called CIVICUS had written to G-20 finance ministers ahead of their meeting to warn that the world is facing a crisis like none in the last century and that debt suspension is not just a first step. Although the global economy has started a gradual recovery with the reopening of businesses and borders, the recovery has been very uneven.
The groups urged the G-20 countries to suspend debt payments until at least 2021, saying many of the poorest countries still spend more on debt repayment than on vital public services. Some countries, such as Pakistan, have called for outright cancellation of debt payments.
Oxfam International said the six-month extension was “the bare minimum the G-20 can do.”
“Failure to cancel debt payments will only delay the debt tsunami that will engulf many of the world’s poorest countries, leaving them unable to afford the investment in health care and the desperately needed social safety nets, ”said Jaime Atienza, an Oxfam official. manages the debt policy.
Oxfam and other groups are also calling on private lenders and investment funds to make similar concessions for poorer countries by suspending debt repayment.
The G-20, in a final statement, also urged private lenders to join its debt suspension initiative.
“We are disappointed by the lack of progress in the participation of private creditors” in debt relief, “and we strongly encourage them to participate on terms comparable to the request of eligible countries,” he said. declared.