COVID-19: Debt Relief and the Global Poorest

Abstract

Pandemic is not the time to “do something”: more than ever, it is the time to “do something coherent.” Aid for the poorest countries conditioned on debt service, just announced by the IMF and G-20, utterly fails that imperative. Instead, grants equivalent to the full IMF estimate of the loss in GDP due to COVID for all IDA-eligible (poorest) countries would secure the appropriate amount and distribution of aid.  And with the burden shared across major G-20 donors, the cost to them would be a minimal part of their own COVID expenditures. And such aid should only be provided in the form of debt write-offs in the cases where that is the appropriate form of grant.