China playing vital role in debt service suspension for developing countries

By Masood Sattar Khan 
(Pakistan News & Features Services)

China has been played a pivotal role in suspension of debt services of over 70 countries, including Pakistan, that would help stem out their economy badly hit by the fatal coronavirus (COVID-19).

“China will, in accordance with the consensus of the G20 on debt relief, help the poorest countries concentrate their efforts on fighting the epidemic and supporting economic and social development,” the foreign ministry spokesperson in Beijing, Zhao Lijian, was quoted as saying in the regular media briefing. 

The G-20 Finance Ministers and Central Bank Governors, during their online virtual meeting on April 15, had focused on overcoming the COVID-19 pandemic and its intertwined health, social and economic impacts. 

Addressing debt vulnerabilities in low-income countries due to the pandemic, G-20 countries support a time-bound suspension of debt service payments for the poorest countries that request forbearance. 

The Minister of Finance of China, Liu Kun, stated during the conference that China supported Debt Service Suspension Initiative for Poorest Countries and appreciated the G20 consensus for the detailed plan. 

Meanwhile, China also vowed to make contributions to this initiative and appeal to multilateral development banks to participate in it as soon as possible. 

It was agreed that both principal repayments and interest payments will be suspended for over 70 countries, starting on May 1, 2020 until the end of 2020. They are all least developed countries as defined by the UN and IDA-countries current on debt service.