The G7 said it was favorable Tuesday to the suspension of the service of the debt of the poor countries, at the time when the IMF and the World Bank seek to limit the damage of the probable worst recession of the world economy since the 1930s. Monday , President Emmanuel Macron had called in a televised address to "help" Africa struggling with the economic consequences of the Covid-19 pandemic by "massively canceling its debt".
"We have to see that this moratorium is already a major step and an important success for France and for its partners within the framework of the Paris Club and within the framework of the G20", explained the French Minister of Economy Bruno Le Mayor during a telephone press conference. "If in some of the poorest states on the planet it appears that the debt is unsustainable (…) this could lead us, as the President of the Republic indicated, to debt cancellation which will therefore be case by case and necessarily in a multilateral framework, "he said.
Aid urgently needed for the most vulnerable countries
In the immediate term, "there is an absolute urgency to provide a strong response to the most vulnerable developing countries", he insisted. Indeed, many of these countries being very exposed to a sharp fall in the price of raw materials and the contraction of international trade, "we observe the risk of seeing food shortages develop in some of these countries which could lead us all right to a humanitarian disaster, ”warned Bruno Le Maire.
The IMF, which released its first global growth forecasts since the start of the pandemic on Tuesday, estimates that sub-Saharan Africa will experience its first recession in a quarter of a century this year, with a 1.6% drop in GDP. , while it remains relatively spared for the moment by the Covid-19. The 76 countries eligible for the moratorium, including around 40 in sub-Saharan Africa, are those assisted by the International Development Association of the World Bank. The servicing of this debt represents a total of $ 32 billion for these countries.
Another 12 billion receivables
“There are still 12 billion multilateral claims, including a large part of the World Bank. We hope that it will also join this moratorium, "added the French Minister for the Economy, indicating that" for technical reasons, there was still a debate today "within this institution. Regarding the 12 billion bilateral claims, "it represents for France a billion euros in debt carry-over," detailed Bruno Le Maire. He recalled that the IMF had used its instruments to provide them with short-term liquidity up to $ 1,000 billion, but estimated that it was necessary to go further.
Finally, he wanted a "new allocation of special drawing rights (a kind of IMF money)" to the tune of 500 billion euros. But "the American response for the moment is negative," he lamented, adding that "it is a response that is inexpensive for IMF member states and very effective for developing states" by allowing them to rebuild financial reserves.
Economy
Growth in free fall, debt exploding… An already very heavy bill for France
Society
Macron wants a moratorium on the debt of African countries ... Trump suspends funding for WHO ...
- Coronavirus
- Debt
- Recession
- Bruno Le Maire
- Economy