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Saudi Trade Minister Majid al-Qasabi chairs a virtual meeting of G20 finance ministers in September
RIYADH (AP) – G20 finance ministers and central bankers will hold talks Wednesday aimed at boosting global recovery from a coronavirus recession while considering a proposal to extend debt relief to poor countries. affected by the crisis.
The virtual talks, organized by the current G20 president, Saudi Arabia, come a day after the International Monetary Fund warned that global GDP would contract 4.4 percent in 2020 and that the damage inflicted by the pandemic will be would feel for years.
The meeting “will discuss updates to the G20 Action Plan – supporting the global economy through the COVID-19 pandemic,” G20 organizers said in a statement.
The group will also discuss “the progress made on the G20 Debt Service Suspension Initiative (DSSI) and its proposed extension until 2021,” the statement added.
The 20 most industrialized nations had pledged in April to suspend debt service for the world’s poorest countries until the end of the year, as they faced a sharp economic contraction caused by the pandemic.
The World Bank and activists have called for the debt suspension initiative to be extended until the end of 2021, while charities like Oxfam say it should be extended until 2022.
But World Bank President David Malpass warned Monday that G20 countries can only approve a six-month debt relief extension because “not all creditors are fully participating” to help poor nations overcome the debt. health crisis.
“I think there will be compromise language (on) maybe a six-month extension that can be renewed depending on debt sustainability,” Malpass said.
DSSI has received 46 applications from eligible countries around the world, most of them from Africa, the G20 said last month.
But global activists have criticized the group for doing little to help poor countries avoid the after-effects of the pandemic.
– Recovery ‘uncertain’ –
The talks, chaired by Saudi Finance Minister Mohammed al-Jadaan and central bank governor Ahmed al-Kholifey, come as the growing health crisis continues to hit the global economy and trigger large-scale unemployment.
Huge injections of government aid have kept economies from sinking further in 2020, but the continued presence of Covid-19 means the outlook is highly uncertain, the IMF said in its latest World Economic Outlook on Tuesday.
The recession has been less severe than expected but still deep and “the rise of this calamity is likely to be long, uneven and highly uncertain,” said IMF chief economist Gita Gopinath.
Activists warn of an impending debt crisis in poverty-stricken developing nations.
The World Bank said Monday that the debt of the world’s 73 poorest countries grew 9.5 percent last year to a record $ 744 billion, showing “an urgent need for creditors and borrowers to work together to avoid the growing risk of a sovereign debt crisis. ” .
Countries’ debt burden to government creditors, most of which are G20 states, reached $ 178 billion last year, he added.
Last month, the G7 finance ministers said they “remain committed” to the DSSI and are once again calling on private creditors to implement the plan.
But Malpass has lamented the lack of participation by private sector creditors, while adding that the richest countries are not doing their full part.
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