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G20 nations are determined to continue to do all they can to contain the COVID-19 pandemic, warning in a draft statement that the global economic recovery remains “patchy, highly uncertain and subject to high downside risks.”
Bringing the pandemic under control is key to supporting a global economic recovery, G20 leaders say in the draft, excerpts of which were obtained by Reuters. A joint final statement will be released by leaders from the United States, China and other groups of 20 nations after they met via video conference on Saturday.
In the draft, leaders noted that the coronavirus crisis has hit the most vulnerable in society the hardest and said some countries may need debt cancellation in addition to a temporary freeze on official debt payments ending in June 2021.
He said G20 leaders will review whether to extend the moratorium, the Debt Service Suspension Initiative (DSSI), for another six months in the spring of 2021, and have approved a common framework for addressing debt issues which is also supported by the Club of Paris of official creditors.
“We are determined to continue using all available policy tools for as long as necessary to safeguard people’s lives, jobs and incomes, support global economic recovery and improve the resilence of the financial system, while safeguarding the risks of downside, “says the statement.
TRANSPARENCY
The project highlighted the importance of borrowers and creditors to increase transparency on public and private debt and urged private sector creditors to participate in the G20 debt cancellation effort on a comparable basis.
They also expressed support for a push by the International Monetary Fund to explore additional tools to address countries’ needs as the crisis evolves and to address the “particular challenges faced by small developing states”.
There has been no specific mention of a new allocation of the IMF’s special drawing rights, a move similar to a central bank printing money, which has so far been blocked by the United States, the IMF’s largest shareholder. US President-elect Joe Biden, a Democrat, is likely to take a more cooperative global stance after taking office on January 20, economists say. Biden is expected to bring the US back into the Paris climate treaty and reverse outgoing President Donald Trump’s threats to step down from the World Health Organization (WHO).
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