Idris Elba, actor, producer, and Global Citizen advocate, urged G20 countries — the world’s top economies — to oversee the suspension and potential cancellation of debt held by low- and middle-income countries in a video address on Tuesday, as part of the World Bank's annual meetings.
G20 countries have already enacted a moratorium on sovereign debt through the end of 2020 because of the COVID-19 pandemic. Extending and broadening debt relief to cover private creditors would save low-income countries $16 billion through 2021 — money that could be better used for purposes like providing health care during a global crisis. Elba said that debt suspension — and even cancellation — would accelerate economic recoveries following the global recession triggered by the pandemic.
“We need to provide quick support in suspending debt payments as long as the crisis lasts, but also looking into longer-term solutions, such as debt cancellation,” Elba said. “The bottom line is: there is no excuse for not taking action. It’s in our best interest to fund a global recovery.”
Elba’s request follows an open letter by Global Citizen, the International Chamber of Congress, and the International Trade Union Confederation that lays out how G20 countries can provide economic relief to low- and middle-income countries.
Focusing on sovereign debt loads might seem abstract, but debt constrains the ability of low-income countries to effectively respond to the COVID-19 crisis, quite literally preventing governments from spending on areas like health care, education, food relief, and more.
Even before the pandemic, 64 countries around the world spent more money servicing sovereign debt than they did on health care.
At @WorldBank Annual Meetings, @idriselba calls on citizens, govs, business leaders & intl orgs to work together to support the world’s poorest & most vulnerable impacted by COVID. “Now is the time to recover better together!" @GlblCtzn#ResilientRecoveryhttps://t.co/w1zgQqNIuDpic.twitter.com/CMDPodhsKa— World Bank (@WorldBank) October 13, 2020
The United Nations warns that the pandemic could unravel decades of development progress.
The economic impact has been particularly devastating for low-income countries that have only been able to mobilize 1.3% of their gross domestic product (GDP) for COVID-19 stimulus plans, compared to 8% on average for high-income countries.
G20 countries can help to address this “stimulus gap” by suspending debt payments, according to Global Citizen’s open letter. The money saved from these measures can be used to fund health care responses to COVID-19, provide emergency aid to people who have lost their sources of income, help students transition back into the classroom, and otherwise restore faltering economies.
Thousands of Global Citizens have joined the call for G20 countries to expand the World Bank’s Debt Service Suspension Initiative (DSSI).
Mick Sheldrick, Global Citizen’s chief policy and government affairs officer, wrote that the G20 should go even further than debt suspension, calling for a wholesale reimagining of international debt, in an article for Forbes.
“Ultimately, private creditors should not be allowed a free ride on the debt relief of others — especially at the expense of the world’s poor,” Sheldrick wrote.
He added: “Institutions like the World Bank, International Monetary Fund, and G20 governments should also do everything they can to remove the power imbalances that put the poorest countries at a profound negotiating disadvantage when dealing with representatives of some of the world’s biggest banks and hedge funds.”