G20 announces to give one-year debt relief to poorest countries

Riyadh (AFP): The G20, a group of 20 nations, has announced a one-year debt standstill for the world’s poorest countries due to the COVID-19 pandemic.

The G20 also reiterated the agreement to extend all available policy tools to deal with the health and economic crisis caused by COVID-19. With over two million, many of the less developed countries are facing the heaviest burden as these nations do not have the spending power to deal with the disease.

The G20 finance ministers and central bankers endorsed a time-bound suspension of debt service payments for the poorest countries, and in the communique following their virtual meeting, said, “All bilateral official creditors will participate in this initiative.”

Saudi Finance Minister Mohammed Al-Jadaan, who currently chairs the group, said this means “poor countries do not need to worry about repaying over the course for the next 12 months.”

The International Monetary Fund and World Bank had been calling on the governments to provide debt relief to the countries most in need. The finance ministers from the G7 (mainly China and Russia) have agreed to do so.

The G20 also called on private creditors, working through the Institute of International Finance, to participate in the initiative.

The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States, and the European Union.