Meeting of Heads of State and Government on the International Debt Architecture and Liquidity

29 March 2021

With the world struggling to overcome the human and economic devastation from COVID-19, the Prime Minister of Canada H.E. Justin Trudeau, the Prime Minister of Jamaica H.E. Andrew Holness ON, MP, and UN Secretary-General António Guterres convened a meeting of world leaders to urge the international community to take additional and urgent action to ensure a robust recovery.

The high-level virtual meeting underscored the urgency of the need for more audacious and concrete action to provide liquidity and address debt vulnerability. It followed the meetings and roundtables held in 2020 under the auspices of the Financing for Development in the Era of COVID-19 and Beyond Initiative (FfDI) to mobilize action to assist the economic recovery from the pandemic.

The COVID-19 pandemic, which has claimed more than 2.6 million deaths and resulted in more than 120 million confirmed cases to date, has gone beyond a health and humanitarian crisis to also become a once-in-a-lifetime global development emergency.

Unprecedented action over the last year has helped control the spread of the deadly virus and mitigate its socioeconomic impact. These emergency policies succeeded in flattening the curve of contagion and saved lives, but they also resulted in a 4.3% drop in global GDP, the first increase in extreme poverty since 1998, and the equivalent of 255 million jobs being lost in 2020.

COVID-19-related economic shocks have already caused rating agencies to downgrade the credit worthiness of 42 countries since the start of the pandemic, including six developed countries, 27 emerging market economies, and nine least developed and low-income countries. The current economic situation has also exacerbated inequalities between and within countries that pose significant threats to global efforts to build back better. The risk of a global sovereign debt crisis, in addition to the fourth global debt wave that the world entered prior to the pandemic, is now greater than ever.

In 2020, discussion groups held under the auspices of the FfDI generated an ambitious menu of options to address the current emergency, build a stronger and more inclusive recovery and invest in a sustainable and resilient future.

Building on the menu of options, the UN Secretary-General released a policy brief advocating for key measures on liquidity, debt standstills, debt relief and the international debt architecture, days ahead of the Spring Meetings of the International Financial Institutions and the ECOSOC Financing for Development Forum.

Moderated by BBC news anchor Laura Trevelyan, the meeting of Heads of State and Government held on 29 March featured opening remarks by the UN Secretary-General and Prime Ministers Trudeau and Holness. Following a high-level roundtable with IMF Managing Director Kristalina Georgieva, World Bank Group President David Malpass, OECD Secretary-General Ángel Gurría and WTO Director-General Ngozi Okonjo-Iweala, more than 20 Heads of State and Government recommended measures to overcome debt and liquidity problems to help the world recover better and invest in the SDGs.

Documents

• Meeting of Heads of State and Government on the International Debt Architecture and Liquidity: Concept Note
• Meeting of Heads of State and Government on the International Debt Architecture and Liquidity: Programme
• Secretary-General’s Policy Brief: “Liquidity and Debt Solutions to Invest in the SDGs: The Time to Act is Now” (Arabic | Chinese | English | French | German | Russian | Spanish)
• Financing for Development in the Era of COVID-19 and Beyond: Menu of Options for the Consideration of Heads of State and Government (Part I)
• Financing for Development in the Era of COVID-19 and Beyond: Menu of Options for the Consideration of Heads of State and Government (Part II)