G20 Postponed poor countries debts payments due to Corona Virus Outbreak-Coronavirus Update

Nations belonging to the G20 group of leading economies have agreed to suspend debt payments owed to them by some of the world's poorest countries.

As coronavirus outbreak in almost all parts of the world. Every country is dealing with the pandemic and imposing lockdowns on all the businesses due to which the economy of countries gets affected. In order to deal with the current situation, world bank and other supporting agencies are giving loans to the underdeveloped and backward countries to fight with the COVID-19.

In light of current Pandemic development, the leading countries of G20 have decided to delay the debts payments which are payable by the poorest and underdeveloped countries. The agreement covers money that’s because of being paid to G20 governments up to the top of 2020. The aim is to assist countries in dealing with the health and economic impacts of the coronavirus pandemic.

The Jubilee Debt Campaign group has described the move as a primary step, but needed rather more. The UK-based charity estimates that the delay will cover $12bn (£9.6bn) of payments. But it’s only a delay and therefore the campaign group understands that the payments will instead be made between 2022 and 2024, together with interest accrued within the meantime. In all, 77 countries are because of having the benefit of the agreement.

The plan was provisionally agreed on Tuesday by the G7 leading developed countries, but it absolutely was conditional on support from the broader G20. Some countries, notably China and Saudi Arabia, which are within the G20 but not the G7, are significant lenders to developing countries. The G7 wanted a contribution to the debt payment suspension from those nations.

The move reflects the widely shared view that low-income countries face an especially severe challenge in addressing both the health and economic consequences of the pandemic. The G20 has also drawn up private lenders to require similar steps for debts owed to them by the poorest countries. However, the G20 suggested this might be done on a voluntary basis.

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The Jubilee Debt Campaign has said that’s not enough. It wants to work out legal changes to confirm that non-public creditors cannot use the courts to sue developing countries if they miss payments. That is particularly relevant to the United Kingdom and New York because most developing-country debt agreements use those jurisdictions’ laws.

The executive members also said that payments should be canceled instead of being slightly deferred. That was done earlier on to the more limited amount of debt payments payable to International funds. It decided to use its own resources to form the payments due within the next six months from 25 low-income countries, mainly in Africa. Overall it is a very good decision and a positive outcome for the underdeveloped countries which are fighting hard to the coronavirus pandemic. It helps them to focus on the health of their people.

Via BBC News

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