Due to the coronavirus pandemic, rising inflation and the war in Ukraine, 165 million people have now fallen into poverty. This was the conclusion of the finance ministers of the G20 countries, who met in India. A temporary suspension of the debt service of the poorest countries is therefore being considered.
But whether it will actually lead to an introduction remains to be seen, according to BNR’s in-house economist Han de Jong. At the moment, he calls the G20 “the forum for contradictions par excellence”. Also because Russia is still part of the G20. “The West too, and many countries support Ukraine,” says De Jong. “But there are also many countries that haven’t taken a stand yet.”
“The G20 is above all the forum of opposites”
The G20 is also at the heart of the US-China rivalry, De Jong knows. “What you see is more and more emerging countries are joining the BRIC countries and doing their own thing,” he says. Something that can also be seen in the closing minutes of the meetings: since February 2022, no joint press releases have been drawn up.
Poverty
But because it’s extreme poverty, De Jong thinks that could soon change. “I really think it’s something people could come to an agreement on,” he continues. All the more so because he believes that the poorest countries are the hardest hit by high inflation, high interest rates and foreign debt in dollars, which is therefore more difficult to pay off. The dollar has weakened slightly lately, but since the outbreak of the pandemic it has strengthened a lot, in the face of higher interest rates. These countries are therefore going through a very difficult moment.’
Solution
If the proposal is approved, it will give the poorest countries some extra breathing room, but it is not an ideal solution. “In a way it’s a stay of execution,” says De Jong. “What you often see is that poorer countries have debts to governments and sometimes they want to cancel them,” says De Jong. “I think this is a first step in that direction.”
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
