The Political Economy of Debt Relief - Capital Newspaper capitalethiopia.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from capitalethiopia.com Daily Mail and Mail on Sunday newspapers.
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In certain circumstances, common morality says that creditors should not force their borrowers to pay interest and principal fully and on time. The COVID 19 pandemic and the global economic collapse it has caused are just such circumstances, for both persons and governments. For the poorest countries harmed by the crisis (e.g., Guinea, Haiti, Nepal), the International Monetary Fund (IMF) has developed a mechanism to free governments from debt servicing payments to the IMF. The principle is right, but the country coverage is far too limited and the period of relief too short.
Barry Herman, a visiting Senior Fellow in the Graduate Program in International Affairs at The New School in New York City stated that the IMF is currently trying to mobilize funds from donor governments to extend its debt relief program although they themselves have huge crisis-related domestic spending needs. However, donor governments do not have to fund poor country debt reli