G-20 suspends debt payments of poor nations by 6 more months

WASHINGTON (AP) — The Group of 20 nations, representing the world’s biggest economies, agreed Wednesday to extend the suspension of debt payments by an additional six months to support the most vulnerable countries in their fight against the coronavirus pandemic.

The suspension of what the G-20 says could provide relief of $ 14 billion in debt payments had been due to expire at the end of the year. Wednesday’s decision gives developing nations until the end of June 2021 to focus spending on health care and emergency stimulus programs rather than debt repayments.

The G-20 announcement was made initially on Twitter during a meeting of the group’s finance ministers and central bank governors, and later confirmed at a news conference. The virtual discussions are being held at the start of this week’s meetings of the 189-nation International Monetary Fund and the World Bank, which are also being conducted virtually because of the coronavirus pandemic.

International aid groups expressed disappointment that more debt relief isn’t being provided by extending the moratorium on debt payments for a full year or by forgiving part of the debt rather than merely suspending payments.

“This pandemic has laid bare a glaring and unjust double standard: The world’s wealthiest countries play by one set of rules, and the world’s poorest by another,” said David McNair, executive director for global policy at ONE, an international aid group.

G20 officials argued that the relief that is being provided is helping 46 of the 73 countries eligible with efforts under way to expand the help.

Some critics have also complained that China objected to portions of the debt relief plans that have been advanced.

“It is unfortunate that the pressing need for broader debt relief for poor countries is being stymied by the apparent recalcitrance of China, which has become a major creditor,” said Eswar Prasad, an economics professor at Cornell University and a former head of the IMF’s China division.