G20: Debt Cancellation

Baroness Kramer Excerpts

Wednesday 10th June 2020 Lords Chamber

[Baroness Penn]

My Lords, I feel I have said quite a bit on debt relief and that we may be supportive in future for certain countries, if that is the right route. In terms of the UK’s contribution to support, very little of our support to countries is in the form of debt and we therefore need to look at other routes as well. That is why the UK is spending over £700 million of its ODA funding towards the Covid response, in addition to normal programming, and is the largest contributor in the G20 to global efforts on a vaccine for Covid.

[Baroness Kramer (LD) [V]]

My Lords, does the Minister agree that, at a time when low-income countries need to intervene to support their economies but lack the reserves, in addition to broader debt cancellation her Government should urge the IMF to initiate a large special drawing rights allocation to speed the recovery of low-income economies?

[Baroness Penn]

The noble Baroness is right that the scale of the economic crisis facing these countries is significant. The IMF predicts that global GDP will fall by 3% in 2020 and says it is the worst global recession since the great depression and much worse than the 2008 financial crisis. We are providing a huge amount of additional support, including through the IMF, which has doubled to $100 billion the emergency financing support available to its members.