Debt standstill for distressed countries must go beyond 2020, says UN expert

By agency reporter
May 16, 2020

The new Independent Expert on foreign debt and human rights, Yuefen Li, has called on international financial institutions, G20 and private creditors to extend the announced six-month debt standstill to low-income and debt-distressed middle-income countries until at least the middle of next year.

The COVID-19 pandemic has widely exposed the debt vulnerability of many developing countries. “Even before the pandemic, 40 percent of low-income countries were struggling to service their debt. Today, to contain the spread of the coronavirus and keep the economy afloat, developing countries would need more than US$2.5 trillion, according to IMF and UN estimates”, said Li.

The IMF and G-20 special measures to ease debt-servicing burdens were welcome by the expert. “However,” she said, “a six-month debt standstill is too short for genuinely assisting debt distressed countries in containing COVID-19. The evolution of the pandemic seems very difficult to predict, with possible new outbreaks and its effects on economies, unemployment, inequalities and poverty will go beyond 2020.”

“I call on the IMF, the G20 countries and regional development banks, as well as the private creditors, to extend the current debt standstills for these countries beyond December 2020 to at least June 2021,” said Li.

She called on international and regional financial institutions and private creditors to carefully consider their actions in light of their own human rights obligations, as well as those of debtors to increase access to adequate health services, water, sanitation and housing and social protection to fight the pandemic.

“It is crucial that this extension is decided now to provide more certainty to the financial market, give the debt-distressed countries a space to breath and to allow them to use the maximum of their available resources to saving lives and to protecting and promoting economic, social and cultural rights until the pandemic is contained and a cure found”,  the Independent Expert said. 

* Office of the High Commissioner for Human Rights https://www.ohchr.org/EN/Pages/Home.aspx

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