By Jan Strupczewski, Christian Kraemer and Andrea Shalal
BRUSSELS / BERLIN / WASHINGTON, Oct 14 (Reuters) – Financial leaders of the Group of 20 major economies on Wednesday underscored the urgent need to control the spread of the coronavirus pandemic and pledged to “do whatever it takes” to support the world economy and financial stability.
In a lengthy statement, the G-20 finance ministers and central bank governors also agreed in principle for the first time on a “Common Framework” to deal on a case-by-case basis with the growing number of low-income countries facing the debt crisis.
This constitutes an important step forward for China, which has become one of the main creditors of poor countries in recent years, but which has resisted the prospect of canceling any debt, according to sources familiar with the G- deliberations. twenty.
The final draft of the communiqué, accessed by Reuters on Wednesday during the annual meetings of the International Monetary Fund and the World Bank, said officials would finalize the new framework in a special meeting before G-20 leaders meet next month. next.
In an earlier draft, ministers adopted the framework, but officials were unable to reach a final agreement this week.
G-20 officials also agreed to extend the freeze on official bilateral debt payments for six months, given continued liquidity pressure on low-income countries, and expressed disappointment at the absence of private sector creditors in the moratorium.
World Bank President David Malpass told G-20 officials that it was critical to look beyond the G-20 Debt Service Suspension Initiative, which only deferred payments but did not reduce them.
The urgency of the crisis, said Malpass, which threatens to leave 150 million more people in extreme poverty by 2021, requires more aggressive and swift action in reducing the debt of the world’s most indebted countries of the poorest. .
“The recession in advanced economies is less severe than had been feared, but in most developing economies it has turned into a depression, especially for the poorest,” he said.
“It is urgent to move quickly on a framework because the risk of disorderly defaults is increasing,” he said.
G-20 leaders, recognizing the highly uncertain and uneven prospects for the global economy, also pledged to continue to address the disproportionate impact that the crisis has had on women, youth and other vulnerable groups in society.
IMF Managing Director Kristalina Georgieva told a press conference that more international cooperation was needed to work on a vaccine, and that early progress could increase global revenues by $ 9 trillion by 2025.
“Nine months after the start of the pandemic, we continue to grapple with the darkness of a crisis that has claimed more than a million lives and has set the economy back, causing a sharp rise in unemployment, increased poverty and the risk of a lost generation in low-income countries, “he said.
“A lasting economic recovery is only possible if we defeat the pandemic everywhere,” he said.
The IMF projects a partial and uneven recovery in 2021, with global growth expected to reach 5.2%, but has warned that significant risks remain, including a resurgence of the virus.
(Reporting by Andrea Shalal, Christian Kraemer and Jan Strupczewksi, Edited in Spanish by Manuel Farías)