G20 debt relief push for poor countries falls short, campaigners say By Reuters


© Reuters. FILE PHOTO: A girl counts Ethiopian birr notes, after promoting a cabbage on the Mercato market in Addis Ababa November 14, 2015. REUTERS/Tiksa Negeri


LONDON (Reuters) – A G20 initiative geared toward lowering monetary strains on the world’s poorest international locations has led to lower than 1 / 4 of debt funds being suspended – effectively beneath expectations of what the programme would ship, a debt marketing campaign charity mentioned on Tuesday.

The group of main economies launched its Debt Service Suspension Initiative (DSSI) within the spring of 2020, designed to supply a brief freeze in funds to low-income international locations – lots of which had already confronted hefty debt burdens earlier than the coronavirus pandemic roiled the worldwide economic system.

“Figures, calculated from IMF and World Financial institution sources, reveal that 46 lower-income international locations that utilized for the scheme nonetheless paid out $36.4 billion in debt funds,” Tim Jones, head of coverage at Jubilee Debt Marketing campaign, a UK charity working to finish poverty, mentioned in a press release.

That in comparison with $10.3 billion of debt funds that had been suspended and simply $600 million that had been cancelled, the assertion added.

Governments together with China, France and Saudi Arabia suspended $10.3 billion in funds however had been nonetheless paid $11 billion, the charity calculated. Non-public collectors, which weren’t compelled to participate within the initiative, suspended simply 0.2% of funds and acquired almost $15 billion in the course of the pandemic.

The World Financial institution on Monday warned of a 12% rise within the debt burden of the world’s low-income international locations to a report $860 billion in 2020 on account of the pandemic, and known as for pressing efforts to scale back debt ranges.

The cash freed up by the DSSI, backed by the G20, the World Financial institution, the Worldwide Financial Fund (IMF) and the Paris Membership of sovereign lenders, was meant to be earmarked for spending on well being techniques and preventing the pandemic.

Shortly after launching the initiative final yr, the World Financial institution estimated the programme may save the poorest international locations $12 billion in 2020 alone.

“The failure to make banks, hedge funds and oil merchants participate within the G20’s flagship debt suspension scheme has made a mockery of this initiative,” Jones mentioned. “Tens of billions of {dollars} have flooded out of lower-income international locations at a time once they had been desperately wanted to guard lives and livelihoods.”

The DSSI programme is operating out on the finish of the yr, although the G20 has additionally launched a Frequent Framework for Debt Remedies, which is designed to scale back the general debt burdens of poor international locations reasonably than freeze funds. Nonetheless, progress has been sluggish with solely three international locations – Chad, Ethiopia and Zambia – having signed up for it and none having accomplished the method.

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