Additional Resources Urgently Needed Says Religious Development Coalition
Washington DC - From Ecuador to the Dominican Republic to Ethiopia, developing countries are struggling to obtain aid and financing to address the health and economic impacts of the coronavirus.
"Because of high debts and austerity policies, countries like Ecuador cannot provide basic health services to confront the coronavirus, let alone help their people survive the economic disaster," stated Eric LeCompte a United Nations finance expert who leads the religious development group, Jubilee USA Network. "While international institutions and aid groups are providing what they can, it's not enough to confront the enormity of this global crisis."
On Friday, the International Monetary Fund is expected to approve $500 million in emergency financing for Ecuador. The Inter-American Development Bank (IDB) approved $700 million in loans for the beleaguered South American Country. About $350 million of the IDB funds are destined to bolster health services and support small businesses. In March, Ecuador's Congress called for a suspension of debt payments on the country's $4.6 billion public debt. 2020 debt payments for Ecuador would surpass 30% of the country's revenue.
In the Caribbean, only Haiti will see debt relief in a plan released from the IMF in April. As hurricane season approaches and islands wrestle with high poverty rates, the IMF predicts a 6.2% contraction of the region's economy. This week the IMF approved concessional financing of $650 million for the Dominican Republic.
As African countries confront the crisis, a number of countries received similar financing packages. Ethiopia will receive a $411 million package. African Finance Ministers called for suspension of debt payments to free up $44 billion to fight Covid-19.
"While the IMF is using just about every tool at its disposal to deal with the crisis, the aid and relief so far is not enough," said LeCompte. "To confront the crisis, the G20 needs to move forward broader debt relief and debt restructuring processes that include the private sector. The IMF and World Bank needs to cancel debts. Countries need to be able to access emergency financial reserves or what's known as the special drawing rights."
The World Bank and IMF released a joint paper on April 17th noting that as the economic crisis deepens, they would consider expanding debt relief to a broader set of developing countries.
In a March 23rd letter to the IMF, Jubilee USA called for a “well-designed, globally-coordinated response from the international community" to address the health and economic impacts of the crisis. The development group detailed a plan to expand debt relief, aid, financing, improve debt restructuring and move forward financial crisis protections and transparency initiatives.
Read Jubilee USA's March 23rd letter to IMF on a health and economic COVID-19 plan here
Read Jubilee USA's April 1st letter to the IMF on reserve gold funds here
Read about the Major Religious Institutions Letter to the President, IMF and G20 to Cancel Debts and Use Reserves to Protect Poor here