Chancellor called to cancel poorest countries' debt during coronavirus pandemic

Published 14 April 2020  |  
Unsplash/Nisuda Nirmantha

Chancellor Rishi Sunak is being urged to cancel debt repayments by the world's poorest countries during the coronavirus pandemic.

Christian Aid is calling on the Chancellor to broker a debt relief deal ahead of the International Monetary Fund's Spring Meeting which will be dominated by coronavirus when it gets underway on Friday.

Dr Matti Kohonen, policy adviser at Christian Aid, said that poorer countries need help from wealthier nations to meet the challenges brought on by coronavirus.

He said that this year alone, 76 of the world's poorest countries are due to spend a total of $40.6bn on debt payments to other governments, private creditors and multilateral institutions.

Dr Kohonen warned that many developing countries were already suffering economically because of the pandemic, even with far lower numbers of infected than many developed countries.

He fears that the situation could become much worse for poorer countries if further restrictions are imposed to slow the spread of coronavirus.

"We are extremely grateful for the UK government's help to safeguard people's future here in our country during the current health crisis," he said.

"Yet, we also need to do more to support our global neighbours to help them tackle their emerging health crisis.

"Although the health impacts in developing countries are small so far, the economic effects of the pandemic have already hit them hard, with commodity prices, exports and public revenues affected and many people forced out of work.

"Additional lockdowns and movement restrictions could exacerbate the effects further. In the poorest nations, there is little social protection in place, and when the health implications do start to rise, poor and vulnerable communities will need a great deal of support."

He added that the money saved on debt repayments could be used by developing countries to meet the costs of tackling the pandemic.

"By dropping the debt, poorer nations could spend money on their own fight against Covid-19, helping to save millions of lives," he said.

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