I share your concerns about the debt vulnerabilities in developing countries, which has been amplified by Covid-19, and I welcome that the UK has made up to £150 million available to the International Monetary Fund’s Catastrophe Containment and Relief Trust to help developing countries meet their debt repayments. The UK has also committed £1 million to the African Legal Support Facility to advise African countries on debt.
Of course, responding to this crisis requires international cooperation. The UK, alongside G20 and the Paris Club of official creditors has committed to a historic suspension of debt repayment from the world’s poorest countries. This will see official creditors provide up to $12 billion of cash-flow relief, which, importantly, will enable countries to focus available resources on tackling Covid-19 and ensure they can direct greater resources to vital healthcare efforts, rather than interest payments. The Chancellor and G20 Finance Ministers have publicly called for the private sector to voluntarily participate in this initiative as well and, if it did so to the full extent, that would provide another $10 billion of breathing space for these countries.
The agreement also provides time to assess what further assistance these countries may need as the full economic impact becomes clearer, for example future restructuring of debt may be needed. I am glad that the Government is keeping all options under review.
I am proud that the UK is at the forefront of the global response to Covid-19. There has never been a more important time for us to be out in the world, delivering our 0.7 GNI commitment and helping the most vulnerable in the world’s poorest countries.