Responding to the announcement that the G20 has agreed to suspend debt repayment of the poorest countries, Nadia Daar, Head of Oxfam International’s Washington DC Office, said:
“Today’s announcement by the G20 is a critical step and will help poor countries free up billions in funds to tackle the coronavirus pandemic. However, the UN estimates that developing countries will need $1 trillion in debt suspension and cancellation to weather the storm ahead. And many countries, such as Lebanon or Ecuador, are left out of this deal when they too need money to save lives and cope with the global economic fallout that the IMF has said is the worst since the 1930s Great Depression.”
Suspending debt owed to rich countries is only one piece of the puzzle. Huge sums are owed by poor countries to rich private banks and investors in New York and London. They should be pushed to cancel debts by enforcement and not left to voluntary action.
Other debt payments are owed to multilateral institutions including the IMF and World Bank, and these too must be cancelled for the year. The IMF can sell some of its huge gold reserves that have risen in value by $20 billion in just the last three months – the windfall profits of that alone would more than cover multilateral debt payments owed this year by the poorest countries.
“While this is an important move by the G20, far more needs to be done to rise to this moment of unprecedented need and save millions of lives. The G20 must not allow the suspended debt payments to accrue into the future, they must cancel all the 2020 debts of all the countries that are being hit by this economic tsunami, and all creditors must follow suit urgently,” Ms Daar said.
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Notes to editors:
The IMF’s gold holdings have increased in value by almost $20 billion since the start of the global pandemic, putting total holdings over $150 billion.
Over 200 organizations, including Oxfam, have signed a statement calling for the cancellation of all debt payments due from developing countries to bilateral, multilateral and private creditors, and more than 750,000 people have signed a petition calling for urgent debt relief.
Together with Oxfam, healthcare workers from around the world are calling in an open letter for all developing country debt payments for 2020 to be cancelled immediately to support doctors and nurses on the frontlines of the pandemic.
Oxfam’s proposed Global Public Health Plan and Emergency Response outlines key actions to increase the capacity of public health systems and cope with the economic cost of the coronavirus. In addition, Oxfam’s recent report ‘Dignity Not Destitution’ calls for an ‘Economic Rescue Package for All’ to support poor countries in tackling the crisis and rebuild a more equal world. Debt relief, together with aid and tax policy, is on the front line of these public health and economic rescue global plans.