Guyana’s President, Dr. Mohamed Irfaan Ali says developed countries must honour their pledge to allocate at least 0.7 percent of their Gross National Income (GNI) to the Official Development Assistance (ODA) programme. This would provide much-needed aid to developing countries, especially at this time when the economic and social fallout of the COVID-19 pandemic is challenging their abilities to effectively mount relief and recovery efforts.
The President made this call during his address to the virtual meeting of Heads of States and Governments on International Debt Architecture and Liquidity on Financing for Development in the Era of COVID-19 and beyond. The initiative was spearheaded by the Governments of Canada and Jamaica, with support from the United Nations (UN).
“The developed world’s achievement of this pledge has been underwhelming. In 2019, Official Development Assistance totaled US$152.8 billion or approximately 0.3 percent of the combined GNI of the Development Assistance Committee Countries. Of the 29 member countries of the Development Assistance Countries, only four met or exceeded the 0.7 percent target. Guyana, therefore, urges the developed countries, particularly the DAC countries to make concerted efforts to increase their ODA allocations to the 0.7 percent target,” President Ali said.
The President also appealed to developed countries and international lending institutions to increase funding to support small developing states to aid their response to natural and biological disasters. Those disasters, he said, exact massive tolls on their economies and infrastructure.
“The pandemic has highlighted the importance of international co-operation. Such co-operation to assist developing countries better shoulder their debt burden has never been more imperative as it is now,” he said.
Meanwhile, Dr. Ali urged developed countries and international financial institutions to immediately revisit and reform the existing international debt framework to make it more responsive to the needs of developing countries.
He applauded the recent initiative of the International Monetary Fund (IMF) to provide special drawing rights of US$650 billion, noting that it would enhance global liquidity and help countries navigate the risks and adverse effects of the pandemic. The G20 countries were also complimented for initiating the debt service initiative which allows more than 70 low-income countries to postpone debt repayment.
“However, we would urge them to seriously consider granting further extension of the standstill period to support the recovery efforts of poor countries. Given the realities that many poor countries are saddled with this distress, we advocate for broad-based debt relief for developing countries, through international frameworks similar to the Paris Club arrangement, such as the heavily indebted poor countries, then HIPC initiative, and the multilateral debt relief initiative.”
The measures, the President said, would provide valuable fiscal space and liquidity for affected countries, and allow them to mount appropriate responses geared at mitigation, relief, and rebuilding efforts in the wake of natural and biological disasters.
The virtual confab was held ahead of the annual meetings of the IMF and World Bank as well as the G20 and G7 meetings and the Financing for Development Forum. It aimed to underscore the urgency of concrete actions to provide liquidity to address debt vulnerability.