To ask the Secretary of State for International Development, what steps she is taking to help tackle the economic effects of covid-19 on local economies in developing countries.
12 May 2020
The UK is actively supporting the poorest countries and most vulnerable people at a time when the secondary economic impacts of COVID-19 are running ahead of the health impacts in many countries.
First, we are supporting countries to free up the fiscal space that they need to reorient spending to responding to the crisis. The UK has made a leading contribution of up to £150 million to the International Monetary Fund (IMF)’s Catastrophe Containment and Relief Trust, to fund the poorest countries’ debt repayments to the IMF. The UK and other G20 countries have also committed to suspend debt service payments for International Development Association-eligible and the UN Least Developed Countries until the end of 2020, providing up to $12 billion of additional fiscal space. We are also providing advisory support to countries covering economic policy and their broader response, including trade-offs associated with containment measures.
Second, we are working with the International Financial Institutions to make additional resources available. We have committed to doubling our existing £2.2bn loan to the IMF’s Poverty Reduction and Growth Trust, to support concessional financing for the poorest countries. The UK also pushed early for a capital increase of the World Bank in 2018 and, thanks to these efforts, the World Bank Group has been in a position to respond rapidly to this crisis, making $160bn of financing available over 15 months.
Third, at a time when many investors are retreating from these markets, CDC, the UK’s Development Finance Institution,?is committed to investing patiently and working alongside other Development Finance Institutions to help companies access the finance they need and to protect supply chains and jobs overseas.
Fourth, the UK is also committed to directly supporting the most vulnerable people affected by the economic fallout of COVID-19. We are currently supporting social protection and/or humanitarian cash transfer programmes in 35 countries, in addition to wider support through multilateral institutions.