‘Let poor nations halt payments to ease crisis’
Western governments are being told to suspend the collection of debt interest from developing nations to prevent a new debt crisis as the coronavirus outbreak escalates.
The International Monetary Fund and the World Bank called on governments that lend to poorer nations to agree to requests for forbearance from poorer nations and to delay taking debt payments, allowing time for an assessment of the crisis impact.
In a joint statement to the G20, the IMF and the World Bank said: “It is imperative to provide a global sense of relief for developing countries as well as a strong signal to financial markets.”
Borrowing costs for low-income countries have surged in recent weeks after investors ditched riskier assets.
In past health crises, developing countries have relied heavily on international aid to fund healthcare costs in the face of falling tax revenues.
Tim Jones, of the Jubilee Debt Campaign, said a debt moratorium was urgently needed for poorer countries, adding that the IMF and World Bank ought to waive payments to themselves and urge private investors to suspend taking debt payments.
“It would be outrageous if speculators keep taking payments from poor countries at this time,” he said.