Reaction to G20 debt suspension and ‘common framework’

  • Jubilee Debt Campaign says failure to cancel debt and include private creditors shows disregard for scale of global South debt crisis which will leave poor countries paying $3 billion a month
  • Calls for G20 to agree scheme to cancel debt payments to private, bilateral and multilateral lenders in emergency meeting next month

The G20 Finance Ministers have announced a 6-month extension to their Debt Service Suspension Initiative. They have also indicated that next month they will discuss a common framework for debt reduction and indicated this will require the participation of private lenders but will only be available on a ‘case-by-case’ basis. They have not given any further details.

Reacting to the announcement of the 6-month extension Sarah-Jayne Clifton, Director of Jubilee Debt Campaign, said:
“The extension of the limited debt suspension scheme does little to tackle the profound debt and health crises impacting many of the poorest people in the world. The G20’s failure to include private and multilateral lenders in the scheme shows a disregard for the scale of the global South debt crisis and will mean over $3 billion in debt payments continue to leave the poorest countries every month. It is scandalous that private lenders are still making large profits out of poor countries at this time.

Reacting to the discussions over a future debt cancellation scheme Sarah-Jayne Clifton added:

“We welcome the G20 plans to discuss debt cancellation and private creditor participation at a special meeting in November. But this needs to be comprehensive, not case-by-case. Next month the G20 need to agree to cancel debt payments by the poorest countries to private, multilateral and bilateral lenders for four years. Doing so could save up to $180 billion to protect livelihoods and public services during the pandemic and support the recovery afterwards.” 

Cafod, Christian Aid, Global Justice Now, Jubilee Debt Campaign and Oxfam have today released a report “Under the radar: Private sector debt and coronavirus in developing countries”.[3] The briefing shines a light on the debt owed to private creditors by five African countries – Ghana, Kenya, Nigeria, Senegal and Zambia. It highlights the central role of enormous financial corporations like BlackRock, HSBC, Goldman Sachs, Legal & General, JP Morgan and UBS.

Jubilee Debt Campaign’s briefing, “How the IMF can unlock multilateral debt cancellation”[2] released earlier this week outlined how gold sales and Special Drawing Rights could be used to fund debt payment cancellation to multilateral institutions. The briefing argued this should be part of a comprehensive scheme which requires private lenders and governments to also cancel debt payments to them.

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