Arab countries were able to defer $500 million in debt payments under the Debt Service Suspension Initiative rolled out by the world’s 20 leading economies, Saudi Arabia’s finance minister said.
“In response to the pandemic, G20 members are taking immediate and exceptional measures to address the Covid-19 pandemic including through the implementation of unprecedented fiscal, monetary and financial stability actions,” Mohammed Al Jadaan said at an online International Monetary Fund and Saudi G20 presidency high-level forum on Wednesday.
“To date, the total benefitted amount to Arab countries is around $500m.”
The group of 20 major economies, which is currently headed by Saudi Arabia under a rotating presidency, in April agreed to a time-bound suspension of debt repayments to help poor nations strengthen their healthcare infrastructure and deal with the economic effects of the pandemic.
So far, the initiative has helped 43 countries defer $5bn in official debt service payments, freeing up funds to finance social, health and economic measures in response to the pandemic. The scheme runs until the end of 2020.
“With the support of the IMF, the World Bank and the regional institutions, we need to strengthen our regional efforts and increase an inclusive growth and enhance opportunities for many people within this region,” Mr Al Jadaan said.
Kristalina Georgieva, the managing director of the IMF, who also spoke during the forum, underscored the importance of improving health, education and social safety nets to enhance access to opportunities.
“Despite much progress, health and education outcomes in this region are not as good as those in similar countries elsewhere. There is an “efficiency gap”, she said.
Employment opportunities for women and young people should also be increased in the Arab world, she said.
“Investment is also needed in both the physical and human elements of digital infrastructure—training coders and engineers, in addition to installing fibre and towers," she added.
Guy Ryder, director-general of the International Labour Organisation, said the impact of the coronavirus has been “devastating on labour markets around the world”.
“Global work hours decreased by 17.5 per cent around the world in the second quarter, while in the Arab world the figure is higher at 19.5 per cent. The Arab countries have taken a bigger hit than the rest of the world.”
In the Arab countries labour income has gone down by 11 per cent, which is the equivalent of 4 per cent of gross domestic product, he added.