Debt write-off required in the wake of the coronavirus crisis

To cope with the coronavirus crisis, low-income countries need to be exempted from paying their debts in 2020.

Half a billion more people could fall into poverty due to the coronavirus and millions of lives are at risk. When people without buffers or access to social security systems lose their income, they quickly find themselves in an unsustainable situation and thrown into extreme poverty, often unable to even buy food for their families.

More than half the world's population could live in poverty after the pandemic. This could set back the fight against poverty by 10 years, and as much as 30 years in parts of Africa and the Middle East. Meanwhile, 50 million are threatened by hunger in West Africa. In countries that were already facing humanitarian crises, access to food has now become difficult.

A $2.5 trillion emergency financial package is needed to address the coronavirus crisis in developing countries. Oxfam is calling on the World Bank, the IMF, and the world's rich countries to vote for an emergency financial package for low-income countries to enable them to provide financial support to those who have lost their incomes and save small businesses. A key to paying for this is writing off debt payments that developing countries should have paid in 2020.

The money from debt cancellation can pay for the damage caused by the coronavirus and to rebuild healthcare systems. The IMF and G20 countries have agreed to suspend debt payments for a number of poor countries, which is a very important first step. But more is needed. The World Bank and private lenders must also act, and payments for 2020 must be canceled completely, not just postponed. Sweden can play an important role by publicly supporting the idea of debt cancellation.

Oxfam is working to prevent the spread of the coronavirus in 65 countries, including through preventive measures such as soap distribution and hand-washing stations. But we also work to help people cope with the economic crisis caused by the coronavirus. In Kenya, for example, we are helping affected people in slums with money sent to their mobile phones so they can afford to buy food for their families.