Economy

China says has given debt relief of $2bn to developing countries

China says has given debt relief of $2bn to developing countries”

The decision was taken during the finance track discussion of the G20 Finance Ministers Meeting, held on Friday (November 20, 2020), ahead of the G20-Leaders' Summit, hosted virtually by Saudi Arabia on Saturday and Sunday (November 21-22, 2020).

The G20 endorsed the Debt Service Suspension Initiative (DSSI) in April to help the poorest countries in response to the COVID-19 pandemic.

G20 leaders are poised to formally endorse extension of a temporary freeze in official bilateral debt payments by the poorest countries, and adoption of a common framework for debt restructuring in the future.

The G20 and the Paris Club have agreed to extend the debt service for a further six months, until June 30 2021.

Read alsoCOVID-19 vaccine by Moderna to cost $25-37Some big creditor countries, including China, also failed to include all state-owned institutions in responding to requests for debt relief.

"While the G20's reaction in April was rapid, it's now lacking urgency", said Oxfam France spokesman Louis-Nicolas Jandeaux.

'During our meeting, I commended the G20 countries as a whole for taking unprecedented actions to mitigate the impact of COVID19-including fiscal and monetary measures-that have helped to prevent massive bankruptcies and an even deeper crisis.

The debt stock of DSSI-eligible countries to biggest global creditors, most of which are G20 states, hit $178 billion previous year, according to the World Bank.

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"(But) it only considers debt forgiveness as a final option - and it isn't binding", warned Jandeaux.

China ranked first among the Group of 20 (G20) members in terms of debt deferral amounts under the Debt Service Suspension Initiative (DSSI) for the poorest countries, Finance Minister Liu Kun said.

However, time is running out.

The same day, Bolivia said it expected to temporarily stop servicing its debts until its economic condition had improved.

In March, panicked investors pulled out $82 billion of capital from developing nations in a matter of days.

As a result, developing nations will this year have access to $700 billion less of external financing than in 2019, according to the Organisation for Economic Co-operation and Development.

The 46 beneficiary nations had a combined debt pile of $71.5 billion at the end of 2018.



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