In April, the G20 countries have announced a one-year moratorium on the debt of the poorest countries. To date, 41 of the 73 poorest countries have requested to benefit from this initiative, which will help them save up to $ 9 billion this year.
July 17, 2020 22: 15
Virtual meeting of the G20 around the recovery post-virus
RIYADH — ministers of Finance and heads of central banks of G20 countries held Saturday a virtual meeting on the recovery of the global economy, severely affected by the coronavirus, in the midst of calls for debt relief for poor countries.
These discussions among the 20 most industrialized countries in the world take place while the pandemic continues to hit a bit everywhere, particularly in several members of this forum such as the United States, Brazil, Mexico or India.
In this context, NGOS are warning the G20, chaired this year by saudi Arabia, against the threat of a debt crisis in the poorest countries.
The leaders “will discuss the global economic outlook and coordinate the collective action for a global economic recovery strong and durable”, said in a press release the organizers of the Riyadh.
Sign that the virus is still threatening, the discussions, chaired by the saudi minister of Finance Mohammed al-Jadaan and the governor of the central bank, Ahmed al-Kholifey, will take place in a virtual way.
The international monetary Fund (IMF) has warned that the global economy, despite some signs of recovery, was facing headwinds, including the possibility of a second wave of the pandemic.
“We are not yet out of business,” said its executive director, Kristalina Georgieva, in a message to the Finance ministers of the G20, noting that the pandemic is likely to increase poverty and inequality.
By revising downwards its growth forecasts, the IMF announced in June that it expects a global GDP decline of 4.9% this year due to a contraction higher than expected during periods of confinement.
The 11 000 billion dollars spent by the governments of the countries of the G20 in assistance to households and businesses, have helped to prevent a deterioration of the situation, but “these safety nets need to be maintained […], in some cases, extended,” said Ms. Georgieva.
In April, the G20 countries have announced a one-year moratorium on the debt of the poorest countries, a measure deemed insufficient by the NGOS.
To date, 41 of the 73 poorest countries have requested to benefit from this initiative, which will help them save up to $ 9 billion this year, according to the organizations Oxfam, Christian Aid and Global Justice Now.
But the 73 countries still have to repay up to $ 33.7 billion of debt by the end of 2020, according to a report released Thursday.
“The G20 Finance ministers have the mission to avoid an impending catastrophe for hundreds of millions of people,” said Chema Vera, acting executive director of Oxfam.
She called to make the G20 initiative “legally binding” until the end of 2022.
Amnesty International has called on the G20 to “cancel the debt of the poorest countries for at least the next two years.”
“If we want to strengthen resilience to future crises, we must make long-term structural changes that will require courage,” said Julie Verhaar, acting secretary general of the NGO.
The French minister of the Economy Bruno Le Maire said Friday that France would ask the G20 to extend the moratorium in 2021.
The argentine minister of foreign Affairs Felipe Sola has announced that he will urge the G20 to create a “solidarity fund” of the world to fight against poverty in the countries affected by the virus.
“We want decisions on the debt, not only for the poorest countries but also for middle-income countries” impoverished by the pandemic, he said in Buenos Aires.
But the members of the G20 are fighting themselves to support their economies heavily affected by the measures taken to contain the spread of the virus.
In June, the Organization of economic cooperation and development (OECD) has estimated that these measures had led to a record loss of GDP of 3.4% in these countries in the first quarter of 2020, the largest decrease since the agency began to identify data in 1998.