G20’s Plan to Help Countries in DebtBy Sofía Hanna | Mon, 11/23/2020 - 18:49
A recent G20 meeting addressed the strategies needed to boost global economic recovery. The first step was to establish a new agreement toward government's debts, a decision made to help smaller countries with their economic burden to prevent them from requesting more financing to pay another debt.
The G20 is a group conformed by the 20 countries that represent 85 percent of the world's wealth: India, Argentina, Brazil, China, Canada, Australia, France, Germany, Indonesia, Japan, Italy, South Africa, South Korea, Mexico, Russia, Saudi Arabia, Turkey, the US, the EU and the UK. Although beneficial, NGOs said the G20’s plan should have considered middle-income nations in its planning, as well as a plan to force private investors to accept contract cancellations, according to an article from Forbes.
On Nov. 20, there was another meeting of the G20 where countries said further action was necessary to contain the economic crisis as the situation remains dire. During this meeting, it was pointed out that some countries will need more help beyond pausing their debt payments. Countries discussed an extension to the Initiative of Suspending the Service of Debt (DSSI) for another six months as a way of helping the countries that need it, according to Forbes. "We are determined to continue using all available tools for as long as it is necessary to save the lives, jobs and incomes of people, to support the economic recovery of the world and to better the resistance of the financial system," the G20 stated.
On Nov. 22, President Andrés Manuel López Obrador asked the G20 to "commit to waiver debt and payments from poor nations of the world." He then stated that the world’s debt has increased by 20 percent since the beginning of the pandemic and that this could become a problem for economic stability and social welfare should no measures be taken. “Although we did not contract additional debt, the consequent loss of wealth raised our country's public debt, from 44.8 to 51.1 percent of the national GDP,” López Obrador said.