On 12th May, the Rt Revd Nick Baines, Bishop of Leeds, received a written answer from Baroness Sugg on the debt of developing countries.
The Lord Bishop of Leeds: HL3476 To ask Her Majesty’s Government what discussions they have had with other G20 leaders to extend the agreement reached on 15 April, to suspend debt payments owed by 77 of the world’s poorest countries, to include the (1) the World Bank, and (2) the African Development Bank.
Baroness Sugg: The UK Government is deeply concerned about the impacts of the COVID-19 pandemic on the public finances of low-income developing countries. The UK, alongside the G20 and the Paris Club of official creditors, has committed to a temporary suspension of debt service repayments from the poorest countries.
The UK, together with other G20 Finance Ministers, has asked the Multilateral Development Banks (MDBs) to explore options for them to participate in the G20 initiative, while maintaining their current credit ratings and low cost of funding which are important for supporting their client countries. The MDBs are currently conducting analysis and will report back to the G20.
During 2020, developing countries were projected to spend around $13 billion on servicing external debts to multilateral creditors. In response to COVID-19, the international financial institutions (including the World Bank and African Development Bank) have made over $300 billion of finance available for developing countries over the coming 15 month