Sri Mulyani Appreciates IMF And World Bank Steps Regarding Relaxation Of Payment Of Poor Sovereign Debt

Minister of Finance, Sri Mulyani. (Photo: Instagram @smindrawati)

JAKARTA - Finance Minister Sri Mulyani Indrawati said the US $ 4.9 billion debt service suspensions initiative (DSSI) which was discussed at the G20 Forum could help pay off debts of poor countries affected by COVID-19.

"This is an initiative to provide relaxation facilities for the debt repayment of poor countries, which are currently facing very, very difficult economic and fiscal conditions," he said as quoted by Antara, Monday, November 23.

Sri Mulyani explained that the initiative, which has been supported by the IMF and the World Bank, agreed to postpone debt repayments of US $ 4.9 billion so that low-income countries have sufficient fiscal space to be able to handle the pandemic.

"Multilateral institutions such as the IMF and the World Bank have agreed to provide relaxation for debt repayments, which will initially be until the end of 2020, then extended until mid-2021," he said.

Sri Mulyani said this focus emerged because all countries were currently working to formulate various policies including fiscal and monetary as well as regulations in the financial sector so that the pandemic could be controlled and the economy could recover.

In addition, he reminded various policies to support economic recovery so that they would not be withdrawn too early and continue to run until the economy really recovers strongly, even though many economies in the G20 countries have shown a reversal in the third quarter of 2020.

On this occasion, Sri Mulyani also emphasized the importance of the role of multilateral institutions in providing financial support for developing or poor countries to get vaccines because this access is very important to support economic recovery.

"In the discussion on the financial track, it was also discussed about the financing of the COVID-19 vaccine, which of course consumes enormous resources. In this case, it was discussed how countries, especially developing countries, can get access to vaccines," he said.

Previously, the G20 Summit which took place virtually brought together world leaders who are members of the G20 for two days to discuss efforts to promote global recovery from the COVID-19 pandemic.

In the session, the heads of countries / governments of the G20 discussed efforts to contain the pandemic in the health sector and global economic recovery, including restoring the labor market, social protection and the global financial system.

In addition, there was discussion about the development of the agreement at the previous summit, including debt suspension support for low-income countries and strengthening the multilateral trading system.