G20 nations are determined to continue doing everything possible to contain the COVID-19 pandemic, warning in a draft communique that the global economic recovery remains ‘uneven, highly uncertain, and subject to elevated downside risks’.
Bringing the pandemic under the control is the key to supporting a global economic recovery, the G20 leaders said in the draft, excerpts of which were seen by Reuters.
A final joint statement will be released by leaders from the United States, China and other Group of 20 nations after they meet by video conference on Saturday.
In the draft, the leaders noted the coronavirus crisis had hit the most vulnerable in society hardest, and said some countries may need debt relief beyond a temporary moratorium on official debt payments now slated to end in June 2021.
G20 leaders said they would decide next spring whether to extend the freeze, the Debt Service Suspension Initiative, for another six months, and endorsed a common framework for debt restructuring hammered out with Paris Club of official creditors.
‘We are determined to use all available policy tools as long as required to safeguard people’s lives, jobs and incomes, support the global economic recovery and enhance the resilience of the financial system, while safeguarding against downside risk’, the statement said.
The daft said both borrowers and creditors should be more transparent about official and private debt, and urged private sector creditors to take part in the G20 debt relief effort.
World Bank President David Malpass told G20 financial officials on Friday some countries may need legislative changes to push private sector creditors to get involved. ‘Given the severity of the crisis, we must move forward now with debt relief processes’, he said.
The draft communique also expressed support for a push by the International Monetary Fund to explore additional tools to address countries’ needs as the crisis evolved, and to address the ‘particular challenges faced by small developing states’.
That could be good news for certain middle-income countries that have been hard by the pandemic, a collapse in tourism, and in some cases, lower commodity prices.
The U.S. Treasury Department last week said it was open to extending the G20 common framework to include middle-income countries and small island state, but the view was not shared by all G20 members.