G20: 46 Countries Applied for Relief Under DSSI

The G20 concluded the International Financial Architecture Working Group meetings for September 2020, where it discussed updates on DSSI. Photo: Twitter account of G20 Saudi Arabia
The G20 concluded the International Financial Architecture Working Group meetings for September 2020, where it discussed updates on DSSI. Photo: Twitter account of G20 Saudi Arabia
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G20: 46 Countries Applied for Relief Under DSSI

The G20 concluded the International Financial Architecture Working Group meetings for September 2020, where it discussed updates on DSSI. Photo: Twitter account of G20 Saudi Arabia
The G20 concluded the International Financial Architecture Working Group meetings for September 2020, where it discussed updates on DSSI. Photo: Twitter account of G20 Saudi Arabia

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.



China Carefully Assembling a Deep-sea Mining Strategy

So-called polymetallic nodules like those seen in this 2016 photograph from Japan are at the heart of the race to mine ocean floors for valuable minerals and metals. HO / JAMSTEC/AFP
So-called polymetallic nodules like those seen in this 2016 photograph from Japan are at the heart of the race to mine ocean floors for valuable minerals and metals. HO / JAMSTEC/AFP
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China Carefully Assembling a Deep-sea Mining Strategy

So-called polymetallic nodules like those seen in this 2016 photograph from Japan are at the heart of the race to mine ocean floors for valuable minerals and metals. HO / JAMSTEC/AFP
So-called polymetallic nodules like those seen in this 2016 photograph from Japan are at the heart of the race to mine ocean floors for valuable minerals and metals. HO / JAMSTEC/AFP

In a world hungry for crucial resources, China may not be poised to start deep-sea mining but it is planting seeds for such operations in a meticulously planned economic and geopolitical strategy.

The world's oceans, both international waters and those under national jurisdiction, are rich in minerals and metals, like cobalt, nickel and copper.

These are important for building electric car batteries, for instance, and other technologies as countries try to transition away from fossil fuels.

China "is an energy-thirsty country. It will look for resources everywhere," including the deep sea, said Julia Xue of Shanghai Jiao Tong University.

But she said China is not particularly anxious over the issue, although recent developments -- one company is itching to be the first to start mining the sea bed -- may put more pressure on Beijing.

A Canadian firm, The Metals Company, has filed an application with the United States to begin undersea mining in international waters.

Using its American subsidiary, it acted after President Donald Trump, bypassing international negotiations, signed an executive order in April to speed up the permit-issuing process for such mining in US and international waters.

Trump cited an obscure 1980 US law that says American citizens can explore for and recover deep sea minerals in areas beyond the country's jurisdiction.

Environmental groups are outraged by Trump's order, arguing that a wild hunt for the potato-sized, metal-containing nodules could harm fragile undersea ecosystems.

The Canadian company initially said it would submit its request to the International Seabed Authority (ISA), a body which has jurisdiction over the ocean floor in international waters.

The Metals Company says it ignored this authority because of its slow pace in talks on adopting a mining code that establishes rules for exploiting seabed resources. The United States is not an ISA member.

A long-time observer of those talks who spoke on condition of anonymity said China is not particularly worried about who starts mining first.

"For them it's more about dominance, staying competitive in the game, and giving the impression that you can't mess with us," the observer said.

With that goal in mind "they're definitely developing the technology and putting the strategic agreements in place," Alex Gilbert, a researcher at the Payne Institute for Public Policy at Colorado School of Mines, told AFP.

For instance, China has reached an agreement with the Cook Islands to explore for minerals in that Pacific country's waters.

Another tiny Pacific nation, Kiribati, also says it is exploring a deep-sea mining partnership with China.

This approach is "more geopolitical than economic," said Emmanuel Hache of the French Institute for International and Strategic Affairs, noting Beijing is using undersea mining as a lure to cement greater diplomatic support as it exerts power.

China holds five contracts handed out by the ISA to look for resources in the Pacific and Indian Ocean sea beds and these contracts cover all types of undersea mineral resources. China's is the largest number of the 22 contracts the organization has granted.

Years behind

"From a research perspective, we have been continuously getting closer. And from a technical perspective, we have been continuously improving," said Chen Xuguang, a researcher at Ocean University of China.

In 2024 a Chinese prototype deep-sea mining vehicle called Pioneer II, developed by Shanghai Jiao Tong University, set a national record by operating at a depth of more than 4,000 meters (13,100 feet).

State-owned Beijing Pioneer Hi-Tech Development Corporation told AFP that later this year it plans a seabed nodule collection test.

Still, China is not as advanced technologically as The Metals Company, experts say.

"I would characterize China as being two to four years behind them in terms of their technology," said Gilbert in Colorado.

Hache, the French expert, put the gap at five years.

But China has an advantage over firms like the Canadian one in recovering and processing nodules: its companies are supported by the state and China has infrastructure for processing metals.

The observer of the international seabed talks said China does not need seabed mining for metal supply, "but maybe geopolitically, in the context of maintaining their control over the commodities market."

China wants to keep its options open, this person said.

And while it supports an international mining code, China does not need one now and "they're not going to put pressure until they've decided strategically that they're ready," said Gilbert.