Debts: Developing Countries

(asked on 30th June 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the upcoming G20 meeting of Finance Ministers, what steps he has taken to facilitate debt relief for developing countries.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 6th July 2020

HM Government is concerned that the COVID-19 pandemic has exacerbated the debt vulnerabilities low-income developing countries, which were already at worrying levels before the crisis.

While the UK cancelled most of our low-income developing country debt under the Heavily Indebted Poor Countries (HIPC) Initiative, the Chancellor joined his G20 counterparts to commit to a temporary suspension on debt service repayments from the 77 poorest countries under the debt service suspension initiative (DSSI). Through the DSSI, official creditors will provide up to US$12bn of cash flow relief to help countries respond to the health and economic impacts of COVID-19.

The Chancellor and his counterparts will be meeting with his G20 counterparts later this month, in part to discuss DSSI implementation. The DSSI provides the breathing room for countries to respond to the crisis and for the international community to determine what further support may be needed for countries on a case-by-case basis. If debts do require restructuring, the UK will work with the Paris Club of official creditors, IMF, and WBG to support equitable debt reductions and long-term sustainable growth.

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