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Debts: Developing Countries

Treasury written question – answered on 1st May 2020.

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Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

To ask the Chancellor of the Exchequer, what representations he has made to (a) his counterparts in the G20 Group, (b) the World Bank and (c) the International Monetary Fund in support of the cancellation of debt for developing countries to support the (i) public health and (ii) economic response to the covid-19 outbreak.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The government is deeply concerned about the impacts of the COVID-19 pandemic on low-income developing countries. In this time of crisis, it is vital that creditors work together to ensure that countries especially vulnerable to the pandemic are able to protect their citizens and economies. The Chancellor joined his G20 counterparts in committing to a temporary suspension on debt service repayments from the poorest countries. The government will continue to work through the G20 and Paris Club of official creditors to monitor sovereign debt vulnerabilities in developing countries closely.

At Budget, the Chancellor announced a leading contribution of up to £150m to the IMF’s Catastrophe Containment and Relief Trust, which will provide the world’s poorest countries relief on IMF repayments. And we have committed to double our existing £2.2bn loan to the IMF’s Poverty Reduction and Growth Trust to provide financial assistance to its poorest and most vulnerable members in their fight against COVID-19.

More broadly, the UK recently led the development of a G20 Action Plan to support the global economy though the COVID-19 pandemic. The Chancellor will continue his regular engagement with his G20 counterparts on the international community’s response to COVID-19.

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