G20 asleep at the wheel on debt crisis

The G20 Finance Ministers met today and issued a communiqué that offered no new action on the debt crisis in lower income countries. Reacting to the communique, Tim Jones, Head of Policy at Jubilee Debt Campaign, said:

“The G20 are asleep at the wheel as the debt crisis intensifies in lower income countries. The G20’s debt suspension scheme has suspended less than a quarter of debt payments, and the debt restructuring scheme has restructured no debt. The current rise in global interest rates will worsen the crisis, preventing countries from recovering from the pandemic. The G20 urgently need to compel private creditors to take part in debt restructuring.”

Ahead of the G20 Finance Ministers meeting, Jubilee Debt Campaign released research showing that the G20 Debt Service Suspension Initiative had led to less than a quarter of debt payments being suspended for those countries which applied. Private creditors received the largest amount of debt payments, $14.9 billion, and suspended just 0.2% of payments.

At the start of 2021, three countries applied for the G20’s Common Framework for debt restructuring – Chad, Ethiopia and Zambia. None have had any debt restructured, with private lenders so far refusing to take part in necessary debt reductions.

The G20 communique once again “reaffirm[s] the importance for … private creditors of providing debt treatments on terms at least as favourable, in line with the comparability of treatment principle, and urge in particular Chad’s private creditors to act swiftly.” However, it does not announce any measures to make private lenders take part in debt restructuring. The G20 communique also says they “welcome the recent progress on the Common Framework for debt treatment”, but do not say what progress this is, given that none of the three countries who have applied have had any debt restructured.

Campaigners at the G7 summit in the UK in 2021 calling for debts to be cancelled

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