By Fr. Benedict Mayaki, SJ
G20 Finance Ministers have announced that decisions on further debt suspensions, permanent debt reductions, and the extension of debt relief for countries hard-hit by the Covid-19 crisis have been left for meetings later this year.
They made this 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 had approved a Debt Service Suspension Initiative lasting till the end of 2020 for 73 developing countries. As of July, 42 countries have applied for the program, asking for a cumulative $5.3 billion in debt to be deferred.
Reacting to the latest development, Jubilee USA Executive Director, Eric LeCompte, said that he “had hoped the debt payment suspension for the world’s poorest countries would be continued into 2021 given the severity of the crisis.”
Appeals for expanded debt suspension
Ahead of last Saturday’s meeting, Jubilee USA, an interfaith alliance of religious, development and advocacy organizations, sent a letter to the G20 Finance Ministers calling for action in the face of the Covid-19 crisis.
The letter, signed by over 200 organizations, recommended expanded debt relief, more aid for developing countries, processes to curb corruption, and enacting market and financial crisis protections for more developing countries.
Le Compte said that the “G20 Finance Ministers offered stronger language on private sector participation in debt relief initiatives for poor countries.”
This is important, he notes, “as some private-sector creditors are resisting the debt relief process.”
The United Nations General Assembly meets in the Fall. However, the next round of decisions on Covid-19 health and economic solutions are scheduled for the October International Monetary Fund (IMF) and World Bank meetings, and the November G20 meetings.
“The G20 wants to see more aid and financing options to consider from the IMF in the Fall,” Le Compte said, adding that “this is an allusion to accessing global reserve funds or what's known as the Special Drawing Rights.”
“The Finance Ministers also emphasized again a strong commitment to moving forward global anti-corruption and anti-money laundering laws,” Le Compte said.