Poorest countries: Debt relief could extend beyond 2020: G7

WASHINGTON: Finance ministers from the Group of Seven nations on Wednesday underscored their commitment to implementing official bilateral debt relief for the world's poorest countries through year-end and possibly longer as they deal with the coronavirus pandemic.

In a lengthy joint statement, the G7 finance ministers urged all official creditors to join the initiative, called for strengthened reporting of public debt data, and said all creditors - public and private - should make responsible lending decisions in line with debt sustainability guidelines.

In an apparent reference to practices reportedly used by China, a major creditor for low-income countries, the ministers of the world's most advanced economies also said creditors should fully disclose terms of public debt and limit use of confidentiality clauses, including for state-owned enterprises.

There have been widespread warnings that low-income and emerging market economies will be hard hit by the pandemic, and that they will need more than the International Monetary Fund's initial estimate of $2.5 trillion to get through the crisis.

A debt relief initiative offered by the Group of 20 major economies and the Paris Club of official creditors through the end of 2020 has drawn applications from only half the eligible countries so far, and private sector participation has been halting.

World Bank President David Malpass last week warned that "much more" debt relief would be needed, urging all commercial creditors to "participate on comparable terms and not exploit the debt relief of others."

The G7 statement underscored the importance of private financing for sustainable development, and said it looked forward to follow-up by private creditors following last week's release of a blueprint for their participation in the debt relief effort by the Institute of International Finance.

The G7 ministers said they welcomed the IIF's leadership, and urged quick progress on creating a repository to host data on private-sector loans to low-income countries.

U.S. Treasury Secretary Steven Mnuchin, in a separate statement, said the group agreed to continue meeting regularly to discuss critical economic issues as they worked to restore their respective economies.