Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to support low-income countries following the end of the Debt Service Suspension Initiative.

The UK has supported significant action on debt through the Debt Service Suspension Initiative (DSSI). Preliminary estimates suggest the DSSI has suspended over $12.7 billion in debt service repayments due by the poorest countries in the world.

The DSSI was designed as a short-term tool to address short-term financing needs. That is why the UK, along with the G20 and Paris Club, also agreed a new Common Framework for Debt Treatments beyond the DSSI, which aims to deliver a longer-term, more sustainable approach to dealing with debt vulnerabilities. This was a landmark achievement for the G20 and represents the first time that all G20 creditors and the Paris Club have committed to work together to coordinate debt treatments. Under the Common Framework, private sector creditors will also be expected to implement debt restructurings that are at least equivalent to those agreed by official creditors.

The UK is fully committed to implementing the Common Framework in coordination with our international partners. This will support those countries who request a debt treatment in returning to a more fiscally sustainable path and support their development goals.

The UK also continues to support low-income countries through the lending activities of the International Monetary Fund (IMF). In October, the Chancellor committed to a new 1 billion loan of Special Drawing Rights (SDR) to the IMF’s Poverty Reduction and Growth Trust (PRGT) which provides zero-interest loans to low-income countries, taking the UK’s total commitment to the PRGT to SDR 5 billion.