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<p>The Government is concerned about the debt vulnerabilities of low-income developing
countries, which have been exacerbated by the COVID-19 pandemic.</p><p> </p><p>The
UK cancelled most of our low-income developing country debt under the Heavily Indebted
Poor Countries (HIPC) Initiative. However, we have remained a global leader in advancing
sovereign debt transparency and sustainability. In April 2020 the Chancellor joined
his G20 counterparts to commit to a temporary suspension on debt service repayments
from the 77 poorest countries under the debt service suspension initiative (DSSI).
To date, the DSSI has supported 43 countries which have requested suspensions by freeing
up $5 billion to fund their COVID-19 responses. Given the depth of liquidity needs
in these countries, the UK supports an extension of the DSSI into 2021.</p><p> </p><p>The
G20 agreed private sector DSSI participation should be voluntary and at borrowers’
discretion. The Government continues to support this approach, which helps protect
these countries’ hard-won market access which will be essential for financing COVID
recovery. Where borrowers do make requests, private creditors should implement the
DSSI. Where sovereign debt reductions are necessary, it will be important for there
to be fair and timely burden sharing between all creditor types, including commercial
creditors.</p>
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