Ambassador Elisabeth Millard
Acting U.S. Representative to the Economic and Social Council
New York, New York
April 14, 2021
Thank you, Mr. Bulow, and panelists, for today’s interesting discussion.
In response to the pandemic, the United States helped lead the G20’s efforts to establish the Debt Service Suspension Initiative, or DSSI, which has provided liquidity relief to help countries respond to the pandemic. But that relief is only temporary, and many countries may need deeper debt treatment.
The United States supported the series of DSSI extensions including the final one that takes us through to the end of 2021. We strongly urge low-income countries to move toward use of a critical tool for support, the G20 Common Framework for Debt Treatment beyond the DSSI.
The Common Framework, which includes both Paris Club and non-Paris Club G20 creditors, incorporates long-standing Paris Club principles and best practices into the debt treatment process which requires comparable debt relief from creditors, includes private sector lenders, and secures greater debt transparency. This is a milestone in sovereign debt resolution.
We strongly urge all creditors to implement the Common Framework fully and transparently to avoid unnecessary delays that can prolong debt overhangs and exacerbate growth shocks.
The United States and other partners have a track record of acting to provide debt relief for developing countries, most notably under the Heavily Indebted Poor Countries Initiative, HIPC, which may provide an estimated $76 billion in debt relief. To date, 37 of 39 HIPC-eligible countries have entered into HIPC treatment.
Lastly, debt transparency is essential to good governance and fiscal sustainability. Public disclosure of official loans helps prevent corruption and harmful lending practices, such as using sovereign assets and export revenues as collateral.
When citizens are provided a window into government finances, it can facilitate better-informed public debate, reduce corruption, and allow the public to better advocate for the needs of their communities, including spending on education, infrastructure, and healthcare.