ONE Campaign reacts to G20 Finance Ministers meeting
WASHINGTON DC – In response to the communique released following today’s meeting of G20 Finance Ministers, The ONE Campaign has welcomed the group’s decision to extend the Debt Service Suspension Initiative (DSSI) until the end of 2021, and its support for the general allocation of $650 billion in IMF Special Drawing Rights.
David McNair, ONE’s Global Policy Executive Director, said:
“It’s a welcome relief to know that countries battling the impossible choices between repaying their debt or fighting the pandemic will be given more breathing space. But as the IMF has shown, the additional debt suspension agreed is merely a drop in the bucket compared to the financing gap facing the world’s poorest countries.
“One year into the crisis, we stand at a critical point in the fight to end the pandemic. The G20 must now work to bring multilateral and private creditors onboard. They must also commit to reallocating their Special Drawing Rights with countries that need more resources to fight the pandemic.”
Notes to editors:
- In 2020, 45 countries signed up for the DSSI, resulting in $5.7 billion in debt payments deferred. Currently, the initiative has been extended until June 2021, which will pause $6.8 billion in debt service payments from participating countries. Extending the standstill until the end of 2021 could potentially save an additional $9.9 billion in bilateral debt service due to G20 countries. Eligible African countries’ share of suspended debt payments would total $9 billion in 2021.
- While multilateral and private creditors have been encouraged to participate in the initiative, they have so far been reluctant. If private creditors and multilateral creditors also suspended debt payments for 2021, up to $25 billion more could be saved for DSSI countries, freeing up crucial government resources for the pandemic response.
- The IMF estimated this week that Low-Income Countries face a financing gap of $200 billion to recover from COVID and another $250 billion to get back on track with fighting poverty.