U.N chief to push G20 to further expand debt service suspension
United Nations secretary-general António Guterres will push G20 leaders to expand debt service suspension to help developing and middle-income economies recover from the coronavirus pandemic.
Addressing a virtual annual ministerial meeting attended by the Group of 77 – a collection of 134 developing countries – plus China, Guterres said: “Many developing countries are suffering from severe liquidity crises related to skyrocketing debt” and the scope of the G20 Debt Service Suspension Initiative “must be expanded to all developing and middle-income countries that are in need.”
The Debt Service Suspension was approved in April. It offers a temporary suspension of government-to-government debt payments to 73 developing countries, although only 43 have signed up so far.
The UN chief said he would advocate for such a policies at the virtual G20 summit next week.
He also said he would continue to advocate for more resources to be given to the International Monetary Fund “to be put at the disposal of developing countries, through the allocation of Special Drawing Rights (SDR).”
IMF chief Kristalina Georgieva first proposed a general allocation of new SDRs at the start of the pandemic. An SDR is an international reserve asset created to supplement IMF member countries’ official reserves.
The change could boost members’ currency reserves by hundreds of billions of dollars, but Washington has blocked the move. The IMF last made use of SDRs during the 2009 financial crisis.
Speaking today Guterres said: “This has not been a good year for multilateralism and international cooperation. So far, the world has not seen the unity and solidarity needed to tackle the pandemic, beat the climate crisis, end the weakening of nuclear safeguards, and strengthen cooperation around digital technology.
“I hope 2021 will be the year in which we reverse these trends and the year we are able to forge a global alliance for carbon neutrality.”