G20 Debt Measures Fall 'Well Short' of What's Needed

Commenting on the G20 debt relief measures today, Nick Dearden, director of Global Justice Now said:

"We're pleased there is consensus that many developing countries should not be forced to service their debts this year. The coronavirus crisis would make this impossible. But what the G20 has offered falls well short of real debt cancellation. For a start, the G20's moratorium means interest continues to accrue and debt would still need to be paid after 2020. This will create a new crisis-point for many countries which were already encumbered with debts run up since the 2008 financial crash.

"Second, this cancellation, it seems, will come out of the money already designated for developing countries in aid money. So these countries are effectively paying for their own debt relief. Third, some of the most egregious debt is owned to the private sector. Tough action needs to be taken so this debt is also written down. Unless this happens, we could see the obscene spectacle of this debt being sold and speculated on, with vulture funds suing impoverished countries in courts here in London.

"Rich countries are injecting unprecedented sums of money into their own economies to deal with the coronavirus crisis. Unless we allow developing countries to do the same, through deep debt cancellation, as well as a large emergency package which is made up of more than simply new loans, many lives will be needlessly lost, and the countries with least ability to weather this crisis will pay the biggest cost. The IMF and World Bank meeting this week must go much further."