ExplainerHow Asian development banks help the poor face coronavirus while the rich fall short

The G20 group of wealthy economies are under fire from debt campaigners for failing to do enough to help poorer places face the pandemic

But the Asian Development Bank and the Asian Infrastructure Investment Bank have been delivering myriad loans to help struggling countries cope

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A maid from the Philippines passes a newspaper kiosk in Beirut, Lebanon. Lebanon spends about 41 per cent of its revenue on debt service. Photo: AP

Published: 7:00am, 27 Jul 2020Updated: 7:00am, 27 Jul 2020

The World Bank and debt campaigners have criticised the G20 group of wealthy economies that includes the United States, Britain and the European Union for falling short on help and assistance to poorer countries, pointing to the low amount of debt suspension.

Multilateral development banks (MDBs), including the World Bank, say they cannot be the ones offering debt relief as it affects their borrowings to lend to poorer countries. They have instead tried to help countries through loans and grants.

Over the last weekend, Finance Minister Mohammed Al-Jadaan of host Saudi Arabia told reporters after a virtual meeting of ministers and central bankers that the G20 would decide on extending the current suspension of debt repayments by the poorest countries towards the end of the year. Analysts saw this as a clear sign the world’s wealthiest countries were not planning to provide additional relief as the Covid-19 pandemic hurts economies around the world.

Saudi Minister of Finance Mohammed Al-Jadaan wears a protective mask as he attends a virtual meeting of G20 finance ministers. Photo: Reuters

WHICH COUNTRIES ARE MOST AT RISK?

Those thought to be the most at risk are developing countries and emerging economies, especially those that were already indebted before the pandemic. In some cases, foreign debt payments took up as much as 40 per cent or more of the governments’ annual reserves.

Estimates from non-profit network Eurodad indicated that 69 of the world’s poorest countries were due to pay US$19.5 billion to other governments and multilateral institutions, and US$6 billion to external private lenders this year.