Saying Guyana is “deeply concerned” over the widening development gap between rich and poor countries as a result of the COVID-19 pandemic, President Irfaan Ali yesterday issued a call for more systems to be put in place to aid countries struggling to rebound from the effects.
“Guyana would therefore like to take this opportunity to urge developed countries and international financial institutions to immediately revisit and reform the existing international debt framework, so as to make it more responsive to developing countries’ needs,” Ali said while speaking during a virtual meeting of Heads of State and Government on the International Debt Architecture and Liquidity, convened by United Nations Secretary-General António Guterres, together with Canada Prime Minister Justin Trudeau and Jamaica Prime Minister Andrew Holness.
According to a press release from the Office of the President, Ali noted that while the pandemic has aggravated the levels of poverty and economic distress, the structure of the existing international debt compounds poorer countries’ bleak recovery prospects.
Against this background, he applauded the recent initiative of the International Monetary Fund (IMF) to provide Special Drawing Rights (SDRs) of US$650 billion, which he said would enhance global liquidity and assist countries to navigate the risk and adverse effects of the pandemic.
The release added that while Ali complimented the G20 countries for initiating the debt service suspension initiative, which allows for the postponement of debt repayments for more than 70 low-income countries, he also strongly urged them to seriously consider granting a further extension of the standstill period to support their recovery efforts.
“Given the reality that many poor countries are saddled with debt distress, we advocate for broad-based debt relief to developing countries through international frameworks, similar to the Paris Club arrangements, such as the debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative, and the Multilateral Debt Relief Initiative. Further, we encourage the granting of debt relief by bilateral and commercial creditors, not explicitly participating in debt relief initiatives,” he was quoted as saying.
He further added that these measures will help to provide valuable fiscal space and liquidity for the affected developing countries, and allow them to mount appropriate responses, geared at mitigation, relief and rebuilding efforts in the wake of natural and biological disasters.
“Immediate relief should be provided. This could be achieved if developed countries, honour the pledge made to allocate at least 0.7% of the Gross National Income (GNI) to official development assistance,” he was also quoted as saying.
According to the release, Ali said that the developed world’s achievement of this pledge has been underwhelming, as only four of the 29 member countries of the Development Assistance Committee (DAC) – Denmark, Luxembourg, Norway, and Sweden – have met or exceeded the 0.7% target.
“Guyana, therefore, urges the developed countries, particularly the DAC countries, to make concerted efforts to increase their Official Development Assistance (ODA) allocations to the 0.7% target,” he said.
Ali also made an appeal for developed countries and international lending institutions to increase funding to support small developing states, so that they can better respond to natural and biological disasters, which exact massive tolls on their economies and infrastructure. “The pandemic has highlighted the importance of international economic cooperation. Such cooperation to assist developing countries better shoulder their debt burdens has never been more imperative as it is now,” he noted.
The release said the high-level virtual meeting, convened as part of the Financing for the Development in the Era of COVID-19 and Beyond Initiative (FFDI), was organised to underscore the urgent need for more concrete action to provide liquidity and address debt vulnerability. It follows the meetings and roundtables held in 2020 under the auspices of the FFDI to mobilise action to assist the economic recovery from the pandemic.
