A group of former central bank governors and finance ministers called on the G20 and world leaders to offer debt relief to developing countries. This relief would help those countries respond to the Covid-19 pandemic and to secure a green and inclusive recovery.
In a statement released on Friday, the group asked G20 leaders to deliver bilateral, multilateral and private sector debt relief on a scale “analogous to the Highly Indebted Poor Countries Initiative“.
“Many developing countries are forced to deploy 30-70% of government revenues to pay off international creditors,” the letter said, forcing them to put climate change and sustainable development goals on hold.
With signatories from 18 countries, including Germany, India, Brazil, South Africa and Ireland, the statement also called on the IMF to make a substantial new allocation of its special drawing rights, a reserve asset that countries can exchange for cash.
In addition, the group also proposed a significant increase in multilateral and regional development bank financing and capital. The letter concludes with a call to the Italian G20 presidency for an emergency summit on a “green and inclusive recovery”.
This intervention is the latest from a growing number of leaders and organisations calling for new liquidity and debt relief to help finance a green recovery in emerging market and developing countries. Statements have come from IMF managing director Kristalina Georgieva, the United Nations and the People’s Bank of China, among others. China has already suspended US$2.1 billion of debt service payments from 23 developing countries.
This page was last updated September 15, 2021
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