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Poorest countries to save $ 12 billion in debt relief in 2020 (World Bank)

NEW YORK (Reuters) – The world’s poorest countries could save more than $ 12 billion owed to sovereign and other creditors this year thanks to their participation in a debt relief program, with Angola alone saving some $ 3.4 billion, according to estimates released Friday in a new World Bank database.

Savings from the COVID-19 Debt Service Suspension Initiative (DSSI) will be short-term, as the initiative only provides for the suspension of debt payments until the end of the period. the year. It defers these payments to a later date but does not cancel them outright.

The second saver among DSSI-eligible countries would be Pakistan, with $ 2.4 billion, followed by Kenya with $ 802 million, the data shows. here.

In terms of savings relative to gross domestic product, Bhutan would reap the most benefits from the plan with 7.3% savings on GDP, followed by Angola at 3.7% and Djibouti at 2, 5%.

In addition to the estimated savings of each country, the database includes details on debt to multilaterals like the International Monetary Fund as well as official and unofficial bilateral debt disbursed and debt service owed per year.

IMF and World Bank officials have warned that the COVID-19 pandemic will hit developing and emerging markets particularly hard given high debt levels, sharp drops in the prices of oil and other commodities and inadequate health systems.

The DSSI is supported by the G-20, the World Bank, the IMF and the Paris Club of sovereign lenders. The database offers a new level of transparency on debts and creditors, including China, which has emerged as one of the largest creditors in Africa and elsewhere over the past two decades.

The Jubilee Debt campaign estimated that canceling debt payments from poor countries, including to private creditors, would free up more than $ 25 billion for countries this year, or $ 50 billion if extended until in 2021.

The United Nations, many African countries and civil society groups have called for debt relief to be extended for two years to allow countries to recover more fully from the economic shock of the pandemic.

Reporting by Rodrigo Campos and Andrea Shalal; edited by Jonathan Oatis

Tags : covid pandemicdebt reliefdebt serviceworld bank
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