Debt relief for poorest countries could extend beyond 2020, G7 says

File: The ministers of the world's most advanced economies also said creditors should fully disclose terms of public debt and limit use of confidentiality clauses, including for state-owned enterprises.

File: The ministers of the world’s most advanced economies also said creditors should fully disclose terms of public debt and limit use of confidentiality clauses, including for state-owned enterprises.

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WASHINGTON – Group of Seven finance ministers said a debt relief initiative for the world’s poorest countries could be extended beyond the end of the year to help deal with economic fallout from the coronavirus pandemic.

In a lengthy joint statement, the G7 finance ministers urged all official creditors to join the initiative, called for strengthened reporting of public debt data, and said all creditors — public and private — should make responsible lending decisions in line with debt sustainability guidelines.

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In an apparent reference to practices reportedly used by China, a major creditor for low-income countries, the ministers of the world’s most advanced economies also said creditors should fully disclose terms of public debt and limit use of confidentiality clauses, including for state-owned enterprises.

The statement followed a videoconference meeting of the ministers amid warnings that low-income and emerging market economies will need more than the International Monetary Fund’s initial estimate of $2.5-trillion to weather the crisis.

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A debt relief initiative offered by the Group of 20 major economies, which includes China, and the Paris Club of official creditors could provide about $12-billion in extra liquidity through the end of the year. But it has drawn applications from only half of 73 eligible countries so far, and private sector participation has been halting.

In their statement, the G7 ministers highlighted the importance of private sector financing for sustainable development. They also urged quick progress on creating a database for private-sector loans to low-income countries.