DUBAI, United Arab Emirates (AP) – The Group of 20 Nations, representing the world’s largest economies, announced Friday that low-income countries hardest hit by the consequences of the coronavirus pandemic could get an extension of your debt bills beyond the middle of the period. 2021, and in the most serious cases, debt cancellation.
The G20 statement, issued after a virtual collection by the group’s finance ministers and central bank governors, said countries had agreed on a “common framework” for “timely and orderly” debt restructuring with the aim of treating creditors in a similar manner and negotiating debt. case by case.
But he did not specify which creditors would settle for a debt cancellation imaginable. China, for example, has continually opposed parts of debt relief plans. for their politically strategic projects in the global future as their own economy slows down.
The assembly comes a month after the G20 agreed to suspend the payment of $14 billion in debt for another six months to 73 of the world’s most needy countries in their fight against the pandemic. health care and emergency stimulus systems without worrying about debt repayments to foreign creditors.
Although the pause in debt service bills was well received as a pardon, experts noted the limitations of a formula that excludes personal lenders, such as investment firms, banks, and bondholders. the wallet of other lenders, regardless of G20 concessions.
The Institute of International Finance, a global banking association, said on a Thursday that personal creditors “are in a position to interact with a smart religion in debt reedding. “However, he said the personal sector had earned “very few applications. “eligible countries, revealing that borrowers may be reluctant to seek help from personal lenders, for fear of a downha review of loans.
The organization’s new “case-by-case approach” for debt negotiations presented Friday, also approved through the Paris Club, a Western sovereign lender organization more commonly, calls for a “fair burden-sharing” among all official creditors, suggesting that China and its disparate loans will require agencies to engage and ask personal creditors to offer a “at least as favorable” debt remedy is offered through which it is offered through which it is offered through creditor countries.
Mohammed al-Jadaan, Saudi Arabia’s finance minister, president of this year’s G-20, praised the framework as “an unprecedented agreement and a fundamental advance in the debt agenda. “
Kristalina Georgieva, managing director of the International Monetary Fund, echoed the praise, the agreement would “more likely” the participation of personal creditors and “increase the viability of our action”.
However, he warned that the debt crisis is “not over” and added that “we want more through debt relief and new financing. “
The organization also announced Friday that it would meet next spring to see “whether the economic and monetary scenario requires” an extension of the debt suspension for six months. A five- to six-year payment schedule can be proposed to eligible countries. for individual creditors.
Before it hit COVID-19, much of the world to come, which already urgently needed doctors and medical equipment, spent huge amounts of profits to pay off external debt. Now that the pandemic has closed borders, halted tourism, reduced oil costs and wiped out remittances, poverty is increasing and resources are declining.
International aid teams have called for greater debt relief and partial cancellation than an undeniable suspension, arguing that poor countries deserve not to cut the necessary spending on stimulus and adequacy systems.
Before Friday’s financial meeting, more than a thousand fitness professionals from around the world sent a letter to the G-20 calling for debt cancellation from upcoming countries.
“It is perverse that poor countries have to pay $3 billion a month in debt payments to banks, the investment budget or the World Bank, as their populations fall further into poverty and destitution,” wrote Chema Vera, Acting Executive Director of Oxfam International.