G20 Wraps Up Summit With Lots of Promises But Very Little Concrete Action on Debt Relief

November 23, 2020

Debt relief for the world’s poorest countries was high on the agenda at this weekend’s Group of 20 summit organized by Saudi Arabia. The conference ended on Sunday with what’s become standard promises to expand its Debt Service Suspension Initiative (DSSI) and calls on private creditors to provide more debt relief to the world’s poorest countries.

One notable change came with the endorsement of a plan to move beyond the DSSI, via a so-called “common framework.” In their final communiqué, the G20 said: “We endorse the “Common Framework for Debt Treatments beyond the DSSI”, which is also endorsed by the Paris
Club.”

But for the most part, nothing that emerged from this latest G20 meeting will fundamentally alter the current downward trajectory of the world’s poorest economies, many of which are starting to buckle under the combined weight of surging debt, depreciating currencies, and rising unemployment.

WHAT THE G20 DID NOT ADDRESS:

PRIVATE CREDITORS: The best the G20 could muster regarding private creditors was to “strongly encourage them to participate” in debt relief initiatives.
CHINA: The group made no mention in its final communiqué about the big problem of commercial loans from Chinese policy banks being excluded from DSSI relief programs.
OTHER VEHICLES: African stakeholders have been pleading for months for the international community to move beyond deferrals to include IMF Special Drawing Rights, new special purpose investment vehicles, and outright debt cancellation, none of which were mentioned.

The Chinese Position at the G20 Summit

PRESIDENT XI JINPING: “In spite of its own difficulties, China has fully implemented the Debt Service Suspension Initiative (DSSI) and put off debt repayment totaling over US$1.3 billion. China supports the decision on DSSI extension and will continue to work with other parties for its full implementation.” (TRANSCRIPT)

CHINA DAILY EDITORIAL: “Yet were it not for the unreasonable blame game some countries have been playing and the unilateralism they’ve been pursuing, the novel coronavirus would not have taken its toll on the world in such a grave manner…China is ready to play its part by doing whatever it can for the well-being of the international community, of poor countries in particular.” (READ MORE)

SUGGESTED READING:

Africa Times: G20 wraps up with African debt relief a priority
Reuters: G20 to extend debt relief to mid-2021, pushes private sector to help by Davide Barbuscia and Andrea Shalal

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Rajpriya Gautam