Social groups urge mass debt relief for poor countries hit by virus crisis
IM

Nearly 140 campaign groups and charities urged the IMF and World Bank, G20 governments and private creditors on Tuesday to help the world’s poorest countries through the coronavirus crisis by cancelling debt payments.

The call, spearheaded by the British-based Jubilee Debt Campaign, comes a day before a Group of 20 working group tasked with the coronavirus response for developing countries is due to meet.

Separately, Ghana Finance Minister Ken Ofori-Atta, who chairs the Development Committee advising the World Bank and International Monetary Fund (IMF), singled out China – Africa’s largest bilateral creditor – to do more to relieve its debt burden.

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The Jubilee Debt campaign urges the immediate cancellation of 69 poor countries’ debt payments for the rest of the year, including to private creditors, estimating that it would free up over $25 billion for the countries, or $50 billion if extended through 2021.

It also called for debt cancellations or additional finance to be free of conditions on economic policy such as austerity, and for the G20 to back emergency rules that would prevent poorer countries from being sued by private creditors.

“Developing countries are being hit by an unprecedented economic shock, and at the same time face an urgent health emergency,” Sarah-Jayne Clifton, Director of Jubilee Debt Campaign, said.

Major governments and institutions are already pushing for some of the measures the groups are calling for.

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The IMF is making $50 billion available from its emergency financing facilities and some 80 countries have already asked for help. The World Bank has also approved a $14 billion COVID-19 response package.

The institutions are also making a joint push for official bilateral creditors to allow low income countries to suspend their debt service payments for 14 months from the start of May.

vanguard

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