G20 strikes historic debt pact to assist poor Covid-hit nations

Paris, November 13

The United States, China and other G20 countries on Friday agreed for the first time on a common approach for restructuring government debt as the Covid crisis leaves poorer nations at risk of default.

Citing the scale of the pandemic and “the significant debt vulnerabilities and deteriorating outlook in many low-income countries,” G20 finance officials agreed more help was needed than a current freeze in official debt payments that runs out at the end of June.

International Monetary Fund (IMF) MD Kristalina Georgieva termed it a historic achievement. “Let’s be very frank here. We are not out of the woods. This crisis is not over. We need further support through debt relief and through fresh financing,” she told G20 officials.

The new framework aims “to facilitate timely and orderly debt treatment” for countries eligible for the debt payment freeze put in place in April, but which only included private sector creditors on a voluntary basis, the G20 statement said.

“Debt transparency is important,” Japanese Finance Minister Taro Aso said. — Reuters

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