The Coronavirus crisis could result in a catastrophic loss of life in poorer countries and push half a billion more people into poverty. Countries like the Central African Republic have just three ventilators for almost five million people, and Malawi has only a quarter of the nurses needed to provide healthcare for all. Yet right now, instead of investing every dollar they have into boosting their healthcare systems to defend against the onslaught of the virus, these countries are having to use their precious resources to pay off external debt.
This week, the G20 finance ministers, the IMF and the World Bank can offer an instant lifeline – by cancelling all external debt payments for 2020. Cancelling debt payments of the 76 poorest countries could save $40 billion immediately and support almost 500 million of the world’s poorest to survive this crisis.
Without action, the Coronavirus crisis will have a disastrous effect in these countries. The solution is urgently needed:
- Cancel all external debt payments due to be made in 2020 for those in need, and most urgently for 76 of the world’s poorest countries as identified by the World Bank. This should include all bilateral, multilateral and private debt for the year.
- Provide emergency additional finance
- Create a process to reduce debt burdens to sustainable levels through overall debt cancellation in coming years.