The United States is leading international efforts to help low-income countries focus resources on recovering from the COVID-19 pandemic.
Countries worldwide have faced increasing health care costs and falling revenues in 2020.
So the United States, in partnership with the World Bank and the International Monetary Fund, led other large economies in a global initiative to allow up to 73 eligible developing countries to suspend over $5 billion in debt payments and to instead focus the resources on responding to and recovering from the COVID-19 pandemic.
Under the Paris Club-G20 Debt Service Suspension Initiative (DSSI), started in May, “Governments will be able to redirect the funds to COVID-19-related health and social needs,” Warren Wilson, a financial economist in the U.S. Department of State’s Office of Monetary Affairs, said in an August issue of State Magazine.
The DSSI has already delivered $5 billion in relief to 46 countries.
U.S. partnerships like this with international financial institutions support the United States’ far-reaching efforts to stabilize and reignite the global economy in the wake of the COVID-19 pandemic.
The United States is the world’s largest donor to multilateral institutions, such as the World Bank, the IMF and the United Nations. These organizations, in turn, are helping developing nations tackle economic fallout from the pandemic.
In 2020, the IMF, in which the United States is the largest shareholder, provided financial assistance to 83 countries and debt service relief to 29 countries during the COVID-19 pandemic, according to its website.
Both the DSSI and IMF emergency relief programs have worked with beneficiaries to implement financial transparency measures to reduce risks of corruption and unsustainable debt.
The United States is “a leader in providing financial assistance to the developing world transparently and sustainably,” said Susannah Cooper, the director of the Department of State’s Office of Monetary Affairs. “Our goal is to support financial stability, economic prosperity, and a strong recovery.”
The Department of State’s Global Economic Activity and Recovery strategy aims to spur post-pandemic economic recovery through steps that include restoring confidence in international commerce as well as travel and transportation.