World Bank Urges G20 to Address Debt Problems Promptly

Marco Green
Ноября 24, 2020

The decision was taken during the finance track discussion of the G20 Finance Ministers Meeting, held on Friday (November 20, 2020), ahead of the G20-Leaders' Summit, hosted virtually by Saudi Arabia on Saturday and Sunday (November 21-22, 2020).

China is promising supplies of its COVID-19 vaccine to developing countries [File: Thomas Peter/Reuters] A third of the $30.5bn of public debt service payments due in 2021 by DSSI-eligible sub-Saharan African nations is owed to official Chinese creditors while a further 10 percent is linked to the China Development Bank, according to the Institute of International Finance.

Liu in his statement fired back and called on the World Bank to help debt-laden countries by setting up a multilateral debt-relief facility that China will consider contributing to.

"While the G20's reaction in April was rapid, it's now lacking urgency", said Oxfam France spokesman Louis-Nicolas Jandeaux.

There is "broad agreement on the key principles that could underpin a Fund-supported programme to help the next phase of the country's COVID-19 response and a strong multi-year effort to stabilize and begin reducing debt levels", the IMF said. The poorest nations' official bilateral debt to G-20 countries reached US$178 billion previous year, with 63 per cent of the total owed to China, a World Bank study showed.

They also said they strongly encouraged private creditors to participate in the initiative on comparable terms when requested by eligible countries.

However, time is running out.

The DSSI offers a temporary suspension of "official sector" or government-to-government debt payments to some 73 low- and lower-middle-income countries, many of which are in Africa, until at least mid-2021.

Fears are growing that debt crises in developing nations could hamstring their ability to vaccinate their people.

Since then, they have fallen foul of a vicious cycle of increasing costs to combat the pandemic coupled with diminished income.

As a result, developing nations would this year have access to US$700 billion less of external financing than last year, the Organisation for Economic Co-operation and Development has said.

"The list of countries involved is too small", said Oxfam France's Jandeaux.

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