Coronavirus: IMF told to ‘massively scale up’ debt cancellation for developing world

Tuesday, 14 April, 2020

Campaigners call for $40 billion of debts to be cancelled in 2020, as IMF announces $0.5 billion fund

Campaigners today launch a global call for debt cancellation to help developing countries deal with the coronavirus crisis. From the UN to the Vatican, calls have been building in recent weeks to relieve developing countries of debts which are preventing them scaling up health and welfare spending.

As the International Monetary Fund and World Bank virtual meetings take place this week, campaigners are demanding a write-down of over $40 billion from rich governments, international institutions and banks. Yesterday, the IMF has announced a fund of $500 million, which campaigners have described as ‘a drop in the ocean’, and criticised the Fund for failing to draw on its own vast reserves to help out.   

For a detailed media briefing on the campaign, see: https://www.globaljustice.org.uk/sites/default/files/files/news_article/debt_media_briefing_ahead_of_g20_final.pdf

Ahead of the IMF-World Bank meetings this week, Nick Dearden, director of Global Justice Now said: 

“Here in Britain, we had 4,000 ICU beds at the start of the coronavirus crisis, and we all know that wasn’t nearly enough. But look at Kenya, a country of 50 million people with only 130 intensive care beds. Or Mali, with 19 million people but only 20 ventilators. These countries need to unleash massive spending to deal with the health and economic crisis, just as our own governments have. But with debt payments costing the most vulnerable of these countries as much as $40 billion this year, they simply can’t do it unless this burden is lifted. 

“We appreciate that both the IMF and Britain have made money available for debt relief. But to date a fairly paltry sum is on the table. The IMF has massive reserves it needs to bring into play this week to allow sweeping debt cancellation. What’s more, countries like Britain need to demand the banks and the private sector also write down debts. It would be obscene if these debts continue to be sold and speculated on in financial centres like London, when impoverished countries are unable to provide the basics to contain this disease.

“In this crisis, we are only as safe as the poorest countries in the world. Institutions like the IMF need to massively scale up their funding for debt cancellation to defeat this outbreak. The measures so far are a drop in the ocean.”   

Notes

1. For a detailed media briefing, see https://www.globaljustice.org.uk/sites/default/files/files/news_article/debt_media_briefing_ahead_of_g20_final.pdf

2. IMF to provide debt relief to help 25 countries address pandemic, 13 April 2020, https://uk.reuters.com/article/uk-imf-world-bank-debt/imf-to-provide-debt-relief-for-25-countries-to-help-them-address-pandemic-idUKKCN21V21O


Photo: Simone D. McCourtie/World Bank

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