LONDON, Oct 12 (Businesshala) – Less than a quarter of a G20 initiative aimed at easing financial strain on the world’s poorest countries has suspended debt payments – well below expectations of the programme, a debt campaign Charity said. Tuesday.
The group of major economies launched its Debt Service Suspension Initiative (DSSI) in the spring of 2020, which was designed to offer a temporary freeze in payments to low-income countries – many of which have been hit by the global pandemic of the coronavirus pandemic. But before coming, he had faced heavy debt burden. Economy
“Statistics, calculations from IMF and World Bank sources show that the 46 low-income countries that applied for the plan still paid $36.4 billion in debt payments,” said Tim Jones, at Jubilee Debt Campaign Head of Policy, a UK charity working to make ends meet. poverty, said in a statement.
Loan payments worth $10.3 billion were suspended and only $600 million was canceled, the statement said.
Governments including China, France and Saudi Arabia suspended $10.3 billion in payments but still paid $11 billion, the charity calculated. Private creditors, who were not forced to participate in the initiative, only suspended 0.2% of payments and received nearly $15 billion during the pandemic.
The World Bank on Monday warned of a 12% increase in the world’s debt burden to a record $860 billion in 2020 as a result of the pandemic, and called for urgent efforts to reduce debt levels .
The money freed up by DSSI, backed by the G20, the World Bank, the International Monetary Fund (IMF) and the Paris Club of sovereign lenders, was earmarked for spending on health systems and fighting the pandemic.
Shortly after launching the initiative last year, the World Bank estimated the program could save the poorest countries $12 billion in 2020 alone.
“The failure of banks, hedge funds and oil traders to participate in the G20’s major debt suspension plan has scoffed at the initiative,” Jones said. “Billions of dollars have been flooded from low-income countries at a time when they were desperately needed to protect lives and livelihoods.”
The DSSI program expires at the end of the year, although the G20 has also launched a general framework for debt treatment, designed to reduce the overall debt burden of poor countries rather than stabilize payments. Although only three countries – Chad, Ethiopia and Zambia – have signed up for it and none have completed the process, progress has been slow.