Leaders of 20 biggest economies (G20) in a joint statement on Sunday strongly encouraged private lenders to take part in ensuring debt relief for the poorest states on comparable terms.
They approved an initiative to prolong a freeze in debt service payments by the poorest state actors to mid-2021 and supported a common approach toward addressing debt issues, as per Reuters.
The G20 debt relief program – launched shortly after the start of the pandemic this spring – has helped 46 of 73 eligible countries defer $5.7 billion in 2020 debt service payments, freeing up funds to fight the pandemic and shore up their economies.
At the same time, lack of private-sector participation and countries' concerns about marring future access to capital markets have limited the success of the debt freeze.
Read alsoCOVID-19 vaccine by Moderna to cost $25-37Some big creditor countries, including China, also failed to include all state-owned institutions in responding to requests for debt relief.
The coronacrisis has exacerbated concerns about high debt levels affecting not just low-income countries, but some middle-income states as well.
International Monetary Fund Managing Director Kristalina Georgieva called for prompt and effective implementation of the debt treatment framework to provide permanent debt relief to the poorest countries, but said other countries also needed help.
The United States has said it is open to expanding the framework to include middle-income countries and small island states, but U.S. officials said that view was not currently shared by all G20 members.
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