A MISSED OPPORTUNITY – ONE response to the G20 Finance Ministers meeting

Today, G20 Finance Ministers and Central Bank Governors met to review progress on their COVID-19 Action Plan and the Debt Sustainability Suspension Initiative. They confirmed that 42 eligible countries have requested to participate in the Debt Service Suspension Initiative so far, but failed to ultimately move the needle on a further debt standstill for the world’s poorest countries.

Reacting to today’s G20 Finance Ministers and Central Bank Governors meeting, Gayle Smith, CEO and President of the ONE Campaign, said:

“This is a missed opportunity to shorten the lifespan of the pandemic by addressing the liquidity crisis impacting the world’s poorest countries. G20 leaders – who have taken extraordinary steps to stabilise their own economies – could have stepped up and extended the debt standstill through 2021, but they chose not to.

“It is unconscionable that the World Bank still refuses to support a multilateral debt standstill. Some of the world’s poorest countries have paid back six times more in debt repayment than they have received in emergency support. The World Bank knows what’s at stake here and business as usual won’t end the pandemic or its aftershocks.

“A complete debt standstill, coupled with the allocation of SDRs, is the fastest and smartest way to inject the capital needed to stabilise the economies and respond to the pandemic. G20 leaders should be at the forefront of efforts to ensure multilateral institutions and private creditors are on board.”

Notes to editors

• Latest analysis from the ONE Campaign reveals that the World Bank is receiving more in debt repayment from the world’s poorest countries than it delivers while they are weathering the crisis. Since the start of the pandemic, the World Bank has received an average of $290 million per month in debt repayment from the world’s poorest countries – money that could be used to save lives.
• The last G20 Finance Ministers and Central Bank Governors meeting in April concluded with the agreement of bilateral debt repayment suspension for the world’s poorest countries for the remainder of 2020, known as the Debt Service Suspension Initiative (DSSI).
• As of mid-July 2020, only $1.9 billion has been committed in emergency COVID-19 financing for DSSI-eligible countries, of which the latest data show only $250 million has actually been disbursed as of the end of May.
• Bilateral debt service only represents about 47% of the total payments due this year. Multilateral institutions – such as the World Bank and the IMF – along with private creditors, make up the rest of the 53%.