The G20 will consider extending debt relief for the world's poorest countries as policymakers from the biggest economies continue to take “exceptional measures” to expedite a global economic recovery.
The group has made progress on the current Debt Service Suspension Initiative, which runs until the end of this year.
So far, 42 countries have asked for assistance under the scheme, resulting in the deferral of about $5.3 billion (Dh19.46bn) in debt repayments, the group said in a communique on Saturday after an online meeting of G20 finance ministers and central bank governors.
“We will consider a possible extension of the DSSI in the second half of 2020, taking into account the development of the Covid-19 pandemic situation,” the group said.
Saudi Arabia’s finance minister Mohammed Al-Jadaan and central bank governor Ahmed Al Kholifey chaired the talks. The kingdom, the biggest Arab economy, holds the rotating presidency of the G20.
The group is expected to receive a report in October from the International Monetary Fund and the World Bank Group on the liquidity needs of countries eligible for debt relief. This is expected to help the policymakers decide on the next steps.
However, there is need for “further progress and [the G20] strongly encourages private creditors to participate in the DSSI on comparable terms when requested by eligible countries”, it said.
G20 nations agreed to a time-bound suspension of debt repayments in April to help poor nations strengthen their healthcare infrastructure and deal with the economic effects of the pandemic.
The initiative stands to benefit 73 members of the International Development Association on a debt service plan with the IMF and the World Bank, as well as the least developed nations as defined by the United Nations.
Official creditors could provide about $14bn in immediate and critical liquidity relief, the World Bank said earlier this year.
The IMF and World Bank on Saturday urged the group to extend the programme, citing the “increasingly desperate” situation of the countries in need of help.
“Time is short,” World Bank president David Malpass said. “We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency.”
The world economy is facing its deepest recession since the Great Depression as the pandemic continues to spread. The virus has killed about 603,000 people worldwide and infected more than 14.3 million others, according to Johns Hopkins University.
Although most economies have begun to reopen, the rate of infection is still increasing in parts of North America, Africa and Asia. The IMF projects that the global economy will shrink 4.9 per cent this year before making a sluggish recovery in 2021.
The fund expects the world economy to suffer a cumulative loss of more than $12 trillion (Dh44.1tn) during this year and 2021.
Two thirds of governments have poured about $11tn (Dh40.4tn) into their economies to bring stability to financial markets, support smaller businesses and protect jobs.
The G20 said on Saturday that while the outlook remained uncertain with “elevated downside risks”, economic activity is expected to recover as countries ease their movement restrictions.
“We are determined to continue to use all available policy tools to safeguard people’s lives, jobs and incomes, support global economic recovery and enhance the resilience of the financial system, while safeguarding against downside risks,” the group’s communique said.
“Fiscal and monetary policies will continue operating in a complementary way for as long as required.”
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Killing of Qassem Suleimani
The Bio
Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”
Holiday destination: “I like Paris very much, it’s a city very close to my heart.”
Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”
Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”
Sholto Byrnes on Myanmar politics
Multitasking pays off for money goals
Tackling money goals one at a time cost financial literacy expert Barbara O'Neill at least $1 million.
That's how much Ms O'Neill, a distinguished professor at Rutgers University in the US, figures she lost by starting saving for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.
"I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could've had $2 million," Ms O'Neill says.
Too often, financial experts say, people want to attack their money goals one at a time: "As soon as I pay off my credit card debt, then I'll start saving for a home," or, "As soon as I pay off my student loan debt, then I'll start saving for retirement"."
People do not realise how costly the words "as soon as" can be. Paying off debt is a worthy goal, but it should not come at the expense of other goals, particularly saving for retirement. The sooner money is contributed, the longer it can benefit from compounded returns. Compounded returns are when your investment gains earn their own gains, which can dramatically increase your balances over time.
"By putting off saving for the future, you are really inhibiting yourself from benefiting from that wonderful magic," says Kimberly Zimmerman Rand , an accredited financial counsellor and principal at Dragonfly Financial Solutions in Boston. "If you can start saving today ... you are going to have a lot more five years from now than if you decide to pay off debt for three years and start saving in year four."
The biog
Title: General Practitioner with a speciality in cardiology
Previous jobs: Worked in well-known hospitals Jaslok and Breach Candy in Mumbai, India
Education: Medical degree from the Government Medical College in Nagpur
How it all began: opened his first clinic in Ajman in 1993
Family: a 90-year-old mother, wife and two daughters
Remembers a time when medicines from India were purchased per kilo
LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Ready Player One
Dir: Steven Spielberg
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Jewel of the Expo 2020
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13.6km of steel used in the structure that makes it equal in length to 16 Burj Khalifas
550 tonnes of moulded steel were raised last year to cap the dome
724,000 cubic metres is the space it encloses
Stands taller than the leaning tower of Pisa
Steel trellis dome is one of the largest single structures on site
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Al Wasl means connection in Arabic
World’s largest 360-degree projection surface
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
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What are the regulations?
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Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
