Question to the Department for International Development:

To ask the Secretary of State for International Development, what recent assessment she has made of the potential merits of cancelling bilateral and multilateral debt repayments for countries in the global south in tackling the covid-19 pandemic.

The UK Government is deeply concerned about the impacts of the COVID-19 pandemic on the public finances of low-income developing countries. During 2020, developing countries were projected to spend around $26 billion on servicing external debts to bilateral and multilateral creditors. In this time of crisis, it is vital that creditors work together to ensure that servicing debts does not prevent countries protecting their citizens and economies.

The UK, alongside the G20 and the Paris Club of official creditors, has committed to a temporary suspension of debt service repayments from the poorest countries. This official sector effort could provide up to $12 billion of additional fiscal space until the end of the year, allowing countries to redirect finances towards mitigating the health and economic impacts of COVID-19. This initiative provides time to assess what further assistance these countries may need.

The G20 has asked the Multilateral Development Banks to explore whether there are options for them to participate in a suspension of debt service payments over the same period as the G20 initiative, while maintaining their current credit ratings and low cost of funding, which are important for supporting their client countries.