-says existing mechanisms affecting poorer countries’ recovery from pandemic
PRESIDENT of Guyana, Dr. Irfaan Ali, has expressed deep concern pertaining to the wide gaps that the COVID-19 pandemic has created between rich and poor countries. He has since called for more systems to be put in place to help countries struggling to rebound from the deadly disease.
“Guyana would therefore like to take this opportunity to urge developed countries and international financial institutions to immediately revisit and reform the existing international debt framework, so as to make it more responsive to developing countries’ needs,” Dr. Ali said.
He was at the time addressing a virtual meeting of heads of state and heads of government, on the International Debt Architecture and Liquidity. The engagement was convened and led by United Nations Secretary-General, António Guterres; Canada’s Prime Minister Justin Trudeau, and Prime Minister of Jamaica, Andrew Holness.
President Ali told the world leaders that while the pandemic has aggravated the levels of poverty and economic distress, the structure of the existing international debt compounds poorer countries’ bleak recovery prospects. He, however, applauded the recent initiative of the International Monetary Fund (IMF) to provide Special Drawing Rights (SDRs) of US$650 billion. This, he said, would definitely enhance global liquidity and assist countries to navigate the risk and adverse effects of the pandemic.
While he complimented the Group of 20 or G20 countries for initiating the debt service suspension initiative, which allows for the postponement of debt repayments for more than 70 low-income countries, President Ali used the forum to “strongly urge” that serious consideration be given to granting a further extension of the standstill period to support their recovery efforts.
“Given the reality that many poor countries are saddled with debt distress, we advocate for broad-based debt relief to developing countries through international frameworks, similar to the Paris Club arrangements, such as the debt relief under the Heavily Indebted Poor Countries (HIPC) initiative, and the Multilateral Debt Relief Initiative,” President Ali noted.
He further urged the granting of debt relief by bilateral and commercial creditorsnot explicitly participating in debt-relief initiatives, since these measures will help to provide valuable fiscal space and liquidity for the affected developing countries, enabling them to mount appropriate responses geared at mitigation, relief and rebuilding in the wake of natural and biological disasters.
“Immediate relief should be provided,” President Ali asserted. He believes that this could be achieved if developed countries honour the pledge made to allocate at least 0.7% of their Gross National Income (GNI) to official development assistance.
Dr. Ali noted that the developed world’s achievement of this pledge has been underwhelming, as only four of the 29 member countries of the Development Assistance Committee (DAC) have met or exceeded the 0.7% target. These countries include Denmark, Luxembourg, Norway, and Sweden.
The Guyanese Head of State also made an appeal for developed countries, and international lending institutions to increase funding to support small developing states, so that they can improve their response to natural and biological disasters, which exact massive tolls on their economies and infrastructure.
“The pandemic has highlighted the importance of international economic cooperation. Such cooperation to assist developing countries better shoulder their debt burdens has never been more imperative as it is now,’’ President Ali appealed.
It should be noted that the high-level virtual meeting, convened as part of the Financing for the Development in the Era of COVID-19 and Beyond Initiative (FFDI), aimed to underscore the urgent need for more concrete action to provide liquidity and address debt vulnerability. It follows the meetings and roundtables held in 2020 under the auspices of the FFDI to mobilise action to assist the economic recovery from the pandemic, which has claimed more than 2.78 million lives and resulted in more than 127 million confirmed cases to date. The pandemic has gone beyond a health and humanitarian crisis to also become an unprecedented global development emergency.
The meeting featured opening remarks by the UN Secretary-General and the leaders of Canada and Jamaica, followed by a high-level roundtable with IMF Managing-Director Kristalina Georgieva; World Bank Group President, David Malpass; OECD Secretary-General, Ángel Gurría; recently appointed WTO Director-General, Ngozi Okonjo-Iweala, and approximately 20 heads of state and governments, who recommended measures to overcome debt and liquidity problems to help the world recover better and invest in the Sustainable Development Goals (SDG)s.