Washington: With a pandemic debt suspension programme nearing its end, IMF Managing Director Kristalina Georgieva urged creditors in more developed countries to keep providing help to impoverished countries on Wednesday.
Early in the epidemic, the G20 countries agreed to the Debt Service Suspension Initiative (DSSI), which allowed 73 low- and middle-income countries to suspend debt payments while the pandemic was underway.
This will expire at the end of the year, and the IMF director urged countries to provide relief under the “Common Framework,” which is geared for DSSI-eligible countries that are still struggling with debt.
“We must speed up the implementation of the G20´s Common Framework for debt resolution,” Georgieva wrote in the Washington-based crisis lender´s blog released ahead of a gathering of the bloc´s leaders in Rome beginning Saturday.
“The keys are to provide more clarity on how to use the framework and offer incentives to debtors to seek framework treatment as soon as there are clear signs of deepening debt distress,” she wrote.
While the DSSI offers repayment over a fixed timeframe following a grace period, the Common Framework is more flexible, with repayment periods based on countries´ individual circumstances and provisions to require participation from private and other lenders.
More than 40 countries have received DSSI relief totaling $5 billion since it took effect in May 2020, according to the World Bank.
The pandemic aid program was originally scheduled to conclude at the end of last year but was extended through the end of 2021.
World Bank President David Malpass earlier this month called for a comprehensive plan to deal with debt loads in low-income countries, which surged 12 percent to a record $860 billion in 2020 amid the pandemic downturn.
He said the DSSI “wasn´t broad enough,” adding, “I think there should be consideration by the world of what to do after January 1. And a suspension is something that could be considered.”