Reuters and the New York Times covered Jubilee USA Network, global business leaders and civil society groups call for debt cancellation in light of the coronavirus pandemic. Read an excerpt below, and click here for the full story.
Global business, workers, civil society join call for debt relief for poorer nations
WASHINGTON (Reuters) - The International Chamber of Commerce on Friday joined a global trade union and a major civil society group to urge immediate debt relief for the world’s poorest countries to help them fight the coronavirus pandemic and mitigate its economic impact.
In an open letter to finance ministers, the groups also urged countries to contribute to the Catastrophe Containment and Relief Trust, an International Monetary Fund instrument that provides debt service relief to its poorest members.
The ICC, the International Trade Union Confederation and Global Citizen, a group pushing to end extreme poverty by 2030, warned that failure to address the debt and financing needs of developing countries could trigger a series of debt defaults that would have devastating and wide-ranging consequences.
“We are concerned that a failure to immediately address the debt and financing needs of developing countries during this unprecedented crisis will result in large-scale loss of lives and livelihoods — potentially resulting in a fundamental collapse of social and economic systems,” the groups wrote.
The letter reflects increasing support for a push by the World Bank and IMF for official bilateral creditors to temporarily suspend debt payments for the poorest countries, which will be hit hardest by the pandemic.
Details of the IMF-World Bank proposal are still being finalized ahead of debate by finance officials at the virtual Spring Meetings of the Fund and the Bank next week.On Friday, the Institution of International Finance, which includes over 450 banks, hedge funds and other financial firms, also backed the call. Other backers include the U.S. Conference of Catholic Bishops and the Jubilee USA Network alliance of faith groups.
WASHINGTON (CNS) — Two leading proponents of debt relief for developing countries urged the White House to lead the call for a moratorium on debt payments for poor nations so they can devote funds to fight the COVID-19 pandemic.
The request came in an April 8 letter from Bishop David J. Malloy of Rockford, Illinois, chairman of the U.S. Conference of Catholic Bishops’ Committee on International Justice and Peace, and Eric LeCompte, executive director of Jubilee USA Network, an alliance of faith-based development and advocacy groups.
The letter said a moratorium would aid the 76 poorest countries while safeguarding U.S. economic interests.
“The leadership of the U.S. government is vital to ensuring that our world will emerge from this pandemic with greater resilience and a renewed understanding of the greater interconnectedness of humanity,” the letter said.
A decision to suspend debt payments would allow for a better way to assess debt sustainability and vulnerabilities and, if necessary, open a process to restructure debt, the letter added.
The request comes as the Group of 20 finance ministers and central bankers from the European Union and industrial and emerging market nations were preparing to discuss the issue during meetings of the International Monetary Fund and World Bank starting April 14.
G-20 finance officials have long expressed concern about the high level of debt of developing nations and emerging market economies.
“Suspending debt payments, with no interest, can immediately allow countries to access funds to bolster their health systems and support needed stimulus packages in the developing world, allowing these countries to provide for their own health safety and security,” the letter said.
Bishop Malloy and LeCompte also wrote that the financial crisis that has emerged as the pandemic grows threatens U.S. imports and exports to developing countries.
“Providing a suspension of debt payments and debt relief will help safeguard our common interests of returning the U.S. economy to prosperity and growth,” they said.
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