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The G-20 pledged to support vulnerable countries beyond a temporary external debt freeze
Controlling the pandemic is the key to supporting a global economic recovery, G-20 leaders said in the draft.
World Bank President David Malpass told G20 finance officials that some countries may need legislative changes to boost the involvement of private sector creditors.
The nations of the Group of 20 (G-20) are determined to continue to do everything possible to contain the Covid-19 pandemic, warning in a draft statement that the global economic recovery remains “uneven, highly uncertain and subject to high downside risks ”.
Getting the pandemic under control is the key to supporting a global economic recovery, G-20 leaders said in the draft. The leaders of the United States, China and other nations of the Group of 20 will issue a final joint statement after they meet by video conference on Saturday.
In the draft, the leaders noted that the coronavirus crisis had hit the most vulnerable in society hardest and said some countries may need debt relief beyond a temporary freeze on official debt payments that ends in June 2021.
He said G-20 leaders would review the possibility of extending the moratorium, the Debt Service Suspension Initiative (DSSI), for another six months in spring 2021, and endorsed a common framework to address debt problems. debt that is also backed by the Official Creditors Club Agreement.
?? We are determined to continue to use all available policy tools for as long as necessary to safeguard people’s lives, jobs and incomes, support the global economic recovery, and enhance the resilience of the financial system, while protecting against shocks. downside risks? the statement said.
The draft underscored the importance of borrowers and creditors in expanding transparency on official and private debt, and urged private sector creditors to participate in the G-20 debt relief effort on a comparable basis.
World Bank President David Malpass told G20 finance officials on Friday that some countries may need legislative changes to boost the involvement of private sector creditors. “Given the severity of the crisis, we must now move forward with debt relief processes,” he said.
The draft communiqué also expressed support for a push by the International Monetary Fund to explore additional tools to address the needs of countries as the crisis evolves, and to address the “particular challenges facing small developing states.”
That could be good news for certain middle-income countries that have been hit hard by the pandemic, a collapse in tourism and, in some cases, lower prices for raw materials.
The US Treasury Department said last week that it was open to expanding the G20 common framework to include middle-income countries and small island states, but that view was not shared by all G20 members.
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