Today the G20 announced a 6-month extension to their Debt Service Suspension Initiative (DSSI). They have indicated that this will be the final extension to the initiative, originally established in May 2020 to suspend bilateral debt payments for 77 countries.
While we welcome this extension, the initiative does not go far enough to meaningfully address debt distress for countries in the global South.
Reacting to the G20 announcement on the extension of the DSSI, Tess Woolfenden, Senior Policy Officer at Jubilee Debt Campaign said:
“The extension of the Debt Service Suspension Initiative is a vital way to keep money in countries for now, especially given the long-lasting impacts of the crisis in the global South. But if we want to move beyond simply delaying a debt crisis, payments must be cancelled, and all countries that need to should be able to access the scheme. Without a robust mechanism compelling private creditors to engage in the initiative, banks and speculators will continue to get repaid thanks to the debt suspensions of other lenders. It has become clear that asking nicely is simply not enough to ensure private creditor engagement.”
The G20 also called on private creditors to engage in the Common Framework, which allows countries to reschedule debts with other governments on a case-by-case basis.
Reacting to the G20 comments on the Common Framework, Tess Woolfenden added:
“It is disappointing that efforts to ensure private sector involvement within the Common Framework are yet to go beyond rhetoric. The G20 should urgently introduce legislation in key jurisdictions, including the UK, to ensure private sector participation in the Common Framework. Without this, the private sector will continue profiting while countries in the global South struggle to respond to the crisis.”
Similarly to the DSSI, the Common Framework is also only accessible to 77 countries.