Analysis: Who Are the Biggest Winners in the G20’s Debt-Relief Programme?
The economic fallout of the Covid-19 pandemic has led to the establishment of a number of debt-relief and financing options for cash-strapped countries. But just how many emerging markets have benefitted from these initiatives?
Debt was already a big issue before the health crisis. According to the IMF, 36 of the 70 markets classified by the fund as being low income were either at high risk of, or already in, debt distress as of February 2020, prior to the declaration of a global pandemic.
The pandemic exacerbated these concerns, as governments raised debt to fund their national responses to the dual health and economic crises.
Institutional support and relief
As more developing nations sought to restructure their debt, G20 governments, along with international finance institutions, developed a number of initiatives to ease the burden.
Chief among these is the Debt Service Suspension Initiative (DSSI), a G20-run scheme that offers a moratorium on bilateral loan repayments owed to G20 members and their policy banks. Initially rolled out in June 2020, the DSSI, which is available to 73 low-income nations, has been extended until the end of this year.
Photo courtesy of Branimir Balogović.