NEW YORK, May 1 (APP): Ethiopian Prime Minister Abiy Ahmed has called for cancellation– not just suspension — of debt payments by developing countries to enable them redirect financial resources toward dealing with the coronavirus pandemic.
In a New York Times’ opinion piece, the Nobel Peace Prize-winning African leader said the recent move by Group of 20 industrialized nations to suspend debt payment of world’s low-income countries until the end of the year was a step in the right direction, but this initiative needed to be even more ambitious.
“At the very least, the suspension of debt payments should last not just until the end of 2020 but rather until well after the pandemic is truly over,” Prime minister Ahmed wrote.
“It should involve not just debt suspension but debt cancellation,” he said. “Global creditors need to waive both official bilateral and commercial debt for low-income countries”.
Pakistan’s Prime Minister Imran Khan was the first to highlight the issue last month when he appealed to the world financial institutions to introduce “global initiative for debt relief” for the developing countries, a move hailed by the UN Secretary-General Antonio Guterres and many countries.
The Ethiopian prime minister, in his op-ed piece, said 64 countries, almost half in sub-Saharan Africa, spent more on servicing external debt last year than on health.
“Immediate and forceful action on debt will prevent a humanitarian disaster today and shore up our economy for tomorrow,” Ahmed wrote. “We need to immediately divert resources from servicing debt toward responding adequately to the pandemic. We need to impede a temporary health crisis from turning into a chronic financial meltdown that could last for years, even decades.”
The Ethiopian prime minister added, “It is in everybody’s enlightened self-interest that the borrowers be allowed breathing space to get back to relative health. The benefits of rehabilitation of the economies of the hardest-hit countries will be shared by all of us, just as the consequences of neglect will harm all of us”.
