G20 calls for full, transparent debt freeze participation
Mohammed Al Jadaan during the virtual meeting of virtual G20 meeting in Riyadh on Saturday.
Dubai - Germany pledges $3.4B for poorest nations; IMF to explore more tools to provide further financing
Finance officials from the Group of 20 countries on Saturday called for wide participation by bilateral creditors to implement a debt freeze initiative for the world's poorest countries.
All official bilateral creditors should adhere to the debt suspension initiative "fully and in a transparent manner", they said in a joint statement following a virtual meeting hosted by Saudi Arabia.
"Global economic activity is expected to contract sharply in 2020 due to the impact of the Covic-19 pandemic and the associated disruptions in supply and demand. While the outlook remains highly uncertain and is subject to elevated downside risks, global economic activity is expected to recover going forward as our economies gradually reopen and the impacts of our significant policy actions materialise," the communique on the G20 website said.
"We are determined to continue to use all available policy tools to safeguard people's lives, jobs and incomes, support global economic recovery, and enhance the resilience of the financial system, while safeguarding against downside risks."
Saudi Finance Minister Mohammed Al Jadaan said the G20 will consider extending a debt suspension initiative beyond this year. He told a news conference in Riyadh that, as of July 18, 42 countries had applied for the initiative.
Germany offers $3.4B
Meanwhile, Germany pledged 3 billion euros ($3.4 billion) to help the world's poorest countries, the finance ministry said. The funds will be made available as long-term loans for the International Monetary Fund's Poverty Reduction and Growth Trust.
"With the funds... low-income countries can receive greatly discounted loans and bridge liquidity bottlenecks," the German finance ministry said.
The International Monetary Fund is exploring additional tools to provide financing to the world's poorest countries and others hit hard by the coronavirus pandemic, managing director Kristalina Georgieva said. She added they should consider extending a freeze in official bilateral debt service payments offered to the poorest countries beyond the end of the year, andwork to promote greater private-sector participation.
World Bank president David Malpass urged the G20 to extend a freeze in official debt payments by the poorest countries through the end of 2021, and said they should start talks on reducing the debt of some countries.