The Group of 20 major economies on Friday said they are looking at structural approaches to secure longer-term financing for developing countries, including development of domestic capital markets and work to catalyze private sector investment.
In a statement, the Saudi G20 secretariat said 46 countries had applied for relief under the Debt Service Suspension Initiative (DSSI) approved by G20 members in April that offers a freeze in official bilateral debt payments to free up funds for countries to spend on fighting the coronavirus pandemic.
“All major official bilateral creditors remain committed to suspending due debt service payments to the most vulnerable countries in these challenging times," said Bandr Alhomaly, the Saudi G20 Presidency IFA WG policy lead.
“These commitments are complemented by the support of the IMF and Multilateral Development Banks to DSSI-eligible countries,” a statement issued by the Saudi G20 Secretariat quoted him as saying.
The initiative provides an estimated $14 billion of immediate liquidity relief by bilateral official creditors alone in 2020, said the statement.
The G20 is also working with international organizations to complement these efforts by committing USD75 billion for DSSI-eligible countries between April-December 2020 alone, part of their USD230 billion commitment for emerging and low income countries as a response to the pandemic, it said.
“In addition, since late March, the IMF has provided debt relief to 28 DSSI-eligible countries and also provided financial assistance of more than USD88 billion to 81 countries, 53 of which are DSSI-eligible countries facing the economic impact of COVID-19,” it added.
“As we begin to look towards a stronger, more resilient recovery, the G20 is exploring structural approaches to secure longer-term financing to developing countries, including through the development of domestic capital markets and crowding-in private sector investments,” Alhomaly said.
“This comes alongside efforts to better manage risks from excessive capital flow volatility, while unlocking greater gains from enhanced cooperation between development partners,” he added.