As the Annual Meetings of the IMF and World Bank draw to a close, Jean Saldanha, Director of the European Network on Debt and Development (Eurodad) reflects on a crucial, but disappointing, week in development finance.

Today the G20 announced a six-month extension to the Debt Service Suspension Initiative. It also extended the period of debt payments suspension from four years to six years. In addition, the G20 announced a common framework for debt treatments beyond the DSSI, the details of which will be announced in November.

• Almost 60 per cent of the Bank’s fast track Covid-19 Facility (US$ 8 billion) is being allocated through its private sector arm, the International Finance Corporation (IFC)
• Publicly available information indicates that as of June 2020, 68 per cent of IFC Covid-19 projects targeted financial institutions
• It also shows that 50 per cent of IFC-supported companies are either majority-owned by multinational companies or are themselves international conglomerates

Today the OECD published its blueprints for how to repair the global corporate tax system, which follows an update that the OECD provided in January 2020. 

• Eurodad analysis shows Covid-19 ‘recovery packages’ could force tax increases and spending cuts in 80 developing countries by 2023, threatening achievement of SDGs.
• 59 countries have fiscal consolidation plans over next three years that are almost five times larger than Covid-19 response packages implemented in 2020

Today the OECD Development Assistance Committee (DAC) – the group of countries that regulate how aid should be reported – agreed new rules for reporting debt relief as Official Development Assistance (ODA). Eurodad regrets that donor governments decided to rush an agreement, which allows them to report additional ODA for debt relief.

• Debt suspension offered by G20 only covers 3.65% of all the debt service payments to be made in 2020 by all developing countries
• G20 leaders urged to massively scale up debt relief and work on longer-term global reforms to resolve debt crises or risk abandoning sustainable development and climate goals

Today, the European Court of Justice decided to annul the European Commission’s decision that Ireland’s tax treatment of Apple constituted illegal state aid.

CSOs are urging donor countries not to change the rules for reporting debt relief as Official Development Assistance (ODA) when they meet this Wednesday (15 July)

Today, the UN Secretary General called for a sovereign debt restructuring mechanism to be established as part of the longer term response to the Covid-19 crisis and its economic impacts. The call is accompanied by a new report from UNCTAD - the main UN body dealing with trade, investment and development issues - calling for a global authority to oversee debt restructurings.