Maldives has called on G20 member countries to extend the Debt Service Suspension Initiative offered to Covid-19 vulnerable countries, until the end of 2021.
Foreign Minister Abdulla Shahid, in his statement at the Annual Meeting of the Ministers of Foreign Affairs of the Group of 77 and China, noted that Covid-19 vulnerable countries including Small Island Developing States (SIDS) will “require alternative financing options to address fiscal liquidity and debt crisis”.
Expressing gratitude towards G20s Debt Service Suspension Initiative, the minister stressed that “economies will still be in recovery next year”.
“We, as a Group, must urge our friends in the G20 to extend their initiative until the end of 2021. As stated by G77, debt relief support measures and additional financing to developing countries should not be tied to any conditionality. Exploration of structural change and innovative financial instruments, such as debt swap mechanisms, should be encouraged for comprehensive solutions towards debt sustainability”Foreign Minister Abdullah Shahid
The foreign minister noted that the ongoing pandemic "has upended life, livelihoods and societies, and slowed economic growth".
In the Maldives, our GDP is expected to contract by as much as 30 percent in 2020. The pandemic has also drawn attention to longstanding vulnerabilities of small island developing states, such as the Maldives, to exogenous shocks. But, unlike the 2004 Tsunami, COVID-19 is expected to induce a much deeper recession due to its effects on demand and supply side simultaneously in both developed and developing countries. The projections of its socio-economic impacts are worrisome, as it is expected to intensify poverty and inequality, and derail the progress towards the attainment of the Sustainable Development Goals.Foreign Minister Abdullah Shahid
Shahid also stressed that an “international climate finance regime that is aware of the unique burdens and risks facing [SIDS] is needed” to properly manage risks, taking into account multi-dimensional vulnerability index, and urged to call on financial institutions and development banks “to become more flexible in their approach to concessional financing and embrace their role in creating a pathway to sustainable and climate-friendly recovery”.
In addition, Shahid said that efforts must be increased to remind our partners in the developed world to fulfil their commitment in providing $100 billion per year in climate financing to developing countries. Minister Shahid also commended the extraordinary south-south cooperation of the G77 countries in supporting each other, and extending financial, material, and technical support during this crisis.
