the IMF and the G20 intend to extend their measures to reduce the debt of the poorest countries

The poorest countries could find some fresh air. The International Monetary Fund (IMF) announced, Monday, April 5, the extension of emergency aid to twenty-eight of the world’s poorest countries in order to reduce their debt and better cope with the impact of the Covid-19 pandemic.

In March 2020, the IMF undertook a fundraising to enable the Disaster Assistance and Response Trust (ARC) to provide debt service relief to the tune of $ 1,000 billion. This concerned twenty-five countries for a period of six months. In October, the device had been extended to twenty-eight countries and extended until April 13. The IMF Executive Board approved on 1er April, to extend it again, until October 15.

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The objective is to “Free up financial resources” to devote them to health, social and economic support to mitigate the impact of the pandemic, explained the institution in Washington. “So far, donors have pledged contributions totaling approximately (…) $ 774 million, from European Union, UK, Japan, Germany, France, Netherlands, Switzerland, Norway, Singapore, China, Mexico , the Philippines, Sweden, Bulgaria, Luxembourg and Malta ”, added, Monday, the IMF.

The President of the World Bank, David Malpass, has also confided that he expects the G20 countries to maintain the moratorium on the debt of the poorest countries until the end of the year. “In October, I called [les pays du G20] to a one-year extension of their debt service suspension initiative [DSSI], he recalled, Monday, during a conference call. The G20 had accepted a six-month extension, until June 30, 2021. The group, which meets on Wednesday April 7, could further extend this suspension “Until the end of this calendar year with clear direction that this will be the last extension”, added Mr. Malpass.

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Debt relief would be needed in the longer term to provide the poorest countries with the opportunity to reduce their debt burden to a more moderate level.

The World with AFP