Cancel poor countries’ debt

Over 300 lawmakers from around the world yesterday urged the International Monetary Fund and World Bank to cancel the debt of the poorest countries in response to the coronavirus pandemic, and to boost funding to avert a global economic meltdown.

The initiative, led by former US presidential candidate Senator Bernie Sanders and Representative Ilham Omar, a Democrat from Minnesota, comes amid growing concern that developing countries and emerging economies will be devastated by the pandemic.

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Widespread shutdowns aimed at containing the virus are taking a huge toll on the global economy, and especially poor countries with weak health systems, high debt levels and few resources to manage the dual health and economic crises.

IMF Managing Director Kristalina Georgieva on Tuesday said the Fund was "very likely" to revise downward its forecast that global output would shrink by 3% in 2020, and said developing countries would need more than $2.5 trillion in financing to weather the storm.

Sanders said poor countries needed every cent to care for their people, instead of servicing the "unsustainable debts" they owe to the large international financial institutions.

In the letter, parliamentarians from two dozen countries on all six continents, said debt service obligations of the poorest countries should be cancelled outright, instead of simply suspended, as agreed by the Group of 20 countries in April. Other signatories include former British Labour leader Jeremy Corbyn and Argentine lawmaker Carlos Menem, who enacted austerity measures when he served as president in the 1980s and 1990s.