Banking & finance

Global business, workers and civil society emphatic in call for comprehensive emergency debt relief

  • 8 October 2020

ICC, ITUC and Global Citizen call for an updated G20 Action Plan to address the barriers that sovereign debt burdens present toward pandemic containment and economic stabilisation.

In an open letter issued today, the International Chamber of Commerce (ICC), the institutional representative of over 45 million businesses, the International Trade Union Confederation (ITUC), the global voice of the world’s working people, and Global Citizen, a movement of engaged citizens who use their collective voice to end extreme poverty by 2030, have urged G20 Finance Ministers to be bold in updating their Action Plan at next week’s meeting.

The letter builds on earlier interventions in April and July, which called for a comprehensive package of debt relief to support the most vulnerable, and notes the highly uneven and uncertain path forward for the global economy and the Sustainable Development Goals.

John W.H. Denton AO, ICC Secretary General, Sharan Burrow, ITUC General Secretary and Michael Sheldrick, Chief Policy and Government Affairs Officer of Global Citizen write:

“It is apparent that the G20 Action Plan agreed in April, while laudable in its intentions, is rapidly becoming insufficient to protect the real economy from long-term scarring. In this connection, we are deeply concerned about the growing impact of the pandemic on young people in developing economies – with new interventions urgently needed to mitigate the effects of school closures and tackle rising child mortality rates.”

The letter also notes troubling statistics across the social, labour and economic dimensions of the crisis, including that 110–150 million people risk falling into extreme poverty by 2021, 34 million jobs have been lost this year in Latin America and the Caribbean alone, and some 54% of small and medium-sized enterprises in least developed countries anticipate having to permanently close their business within the next six months absent a significant increase in either demand or emergency financial support.

Motivated by the desperate conditions facing many developing economies, the letter calls for higher ambition with respect to debt relief, including cancellations and a further suspension of repayments. The groups call for the Debt Service Suspension Initiative (DSSI) to be extended until April 2022, and the scope broadened to include lower-middle and middle-income countries, based on their health and debt vulnerabilities.

Mr Denton said:

“The pandemic’s devastating effect on small business cannot be met with half measures. We are at serious risk of a lost decade for the global real economy unless the G20 raises the bar on sovereign debt relief.”

Read the letter