Debt Relief Urged To Help Poor Countries Fight Coronavirus

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More than 100 global organizations and charities have called for the cancellation of the debt payments of the world's poorest countries to help them through the coronavirus pandemic.

The statement is being sent to the Group of 20 (G20) governments, the International Monetary Fund (IMF) and World Bank. It calls for a range of measures to cancel debt payments in 2020 and a process to reduce debt burdens through overall debt cancellation in coming years.

"Developing countries are being hit by an unprecedented economic shock, and at the same time face an urgent health emergency," Sarah-Jayne Clifton, director of Jubilee Debt Campaign, said in a statement on April 7.

The British charity is among the nearly 140 signatories of the statement. Among its other backers are Oxfam and Save the Children.

The campaign urged the immediate cancellation of 69 poor countries' debt payments for the rest of the year, including to private creditors. It estimates this would free up more than $25 billion for the countries, $50 billion if extended into next year.

It also called for debt cancellations or additional finance to be free of conditions on economic policy such as austerity.

The statement comes a day before a meeting of a G20 working group tasked with the coronavirus response for developing countries.

The IMF and World Bank have already called for a suspension of debt payments by the poorest countries to other governments, but these payments would still need to be made in coming years.

Clifton said while that would save money now, it "kicks the can down the road and avoids actually dealing with the problem of spiraling debts."

She said the cancellation of debt immediately would be the fastest way to keep money in countries for responding to the pandemic.

The statement also calls for a process to reduce debt burdens once the health crisis is over.

The IMF has already made $50 billion available from its emergency financing facilities, and some 80 countries have already asked for help. The World Bank has also approved a $14 billion COVID-19 response package.

With reporting by Reuters