The rich G20 countries launched the Debt Service Suspension Initiative (DSSI) last year.
IMF Managing Director Kristalina Georgieva urged the G20 on Wednesday to accelerate the implementation of a “common framework” to restructure the debt of poor countries.
The rich countries of the G20 launched last year, after the start of the pandemic, the Debt Service Suspension Initiative (DSSI) for the poorest nations, which they then extended until the end of 2021.
In addition, in November 2020 they created a “common framework” aimed at restructuring or even canceling the debt of the countries that requested it.
However, for the moment, private creditors, especially the Chinese, are slowing down its implementation.
“We must accelerate the implementation of the common G20 framework,” Georgieva said in a blog posted on Wednesday ahead of the meeting of the group of the most industrialized nations at the weekend in Rome.
The head of the IMF indicated that it is essential to “clarify” how this framework will be used and to “encourage” debtor countries to request it “as soon as there are clear signs of worsening over-indebtedness.”
“Early engagement with all creditors, including the private sector, and faster debt settlement times will make a difference in the role and appeal of the common framework,” Georgieva noted.
World Bank President David Malpass had warned during meetings of multilateral credit agencies in mid-October about the risks of over-indebtedness in poor countries emerging from the pandemic, urging a “comprehensive approach” to the problem of debt. debt, including its reduction.
Malpass highlighted the need for urgent action when the DSSI expires in late December.
He also urged all stakeholders to implement the “common framework” to provide assistance to countries eligible for ISDD once the program expires.
More than 40 countries received aid through the DSSI for a total of 5,000 million dollars since its entry into force in May 2020, according to data from the World Bank.
Debt soared 12% in poor countries eligible for DSSI to a record $ 860 billion last year, according to a report by the agency released earlier this month.
“Although the global economic recovery continues, too many countries continue to suffer severely,” Georgieva noted on Wednesday. “In this precarious situation, vulnerable nations should not be asked to choose between paying creditors and providing medical care,” (I)
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