ICC calls for comprehensive emergency debt relief

In an open letter issued yesterday, the International Chamber of Commerce (ICC), the institutional representative of over 45 million businesses, the International Trade Union Confederation (ITUC), the global voice of the world’s working people, and Global Citizen, a movement of engaged citizens who use their collective voice to end extreme poverty by 2030, have urged G20 Finance Ministers to be bold in updating their Action Plan at this week’s meeting.

The letter builds on earlier interventions in April and July, which called for a comprehensive package of debt relief to support the most vulnerable, and notes the highly uneven and uncertain path forward for the global economy and the Sustainable Development Goals.

ICC Secretary General John W.H. Denton AO, ITUC General Secretary Sharan Burrow and Chief Policy and Government Affairs Officer Michael Sheldrick of Global Citizen write: “It is apparent that the G20 Action Plan agreed in April, while laudable in its intentions, is rapidly becoming insufficient to protect the real economy from long-term scarring. In this connection, we are deeply concerned about the growing impact of the pandemic on young people in developing economies – with new interventions urgently needed to mitigate the effects of school closures and tackle rising child mortality rates.”

The letter also notes troubling statistics across the social, labour and economic dimensions of the crisis, including that 110–150 million people risk falling into extreme poverty by 2021, 34 million jobs have been lost this year in Latin America and the Caribbean alone, and some 54% of small and medium-sized enterprises in least developed countries anticipate having to permanently close their business within the next six months absent a significant increase in either demand or emergency financial support. 

At a minimum, the package should include:

• Extending the suspension of debt payments to 30 April 2022, commensurate with the anticipated economic uncertainty and scarring caused by the pandemic;
• Broadening the scope of the DSSI to encompass lower-middle and middle-income countries, based on their health and debt vulnerabilities;
• Replenishing the IMF Catastrophe Containment and Relief Trust (CCRT), to cover all Poverty Reduction and Growth Trust loan repayments through April 2022;
• Creating and funding mechanisms at the Multilateral Development Banks modelled on the IMF CCRT, covering—at a minimum—repayments owed by IDA and IDA-blend countries through April 2022;
• Establishing new institutional mechanisms to enable full participation from private and bilateral creditors in the provision of debt forbearance in accordance with any expansion to the DSSI;
• Clarifying the expectation that private creditors will participate collectively on comparable terms with official creditors; and

Addressing any potential barriers to the full participation of private creditors in DSSI by providing coordinated clarification on the implementation of applicable regulatory frameworks.

ICC global is represented in Sri Lanka by ICCSL.