The Tunisian Observatory of Economy asked for dropping the debt service of developing countries in 2020 to decrease the economic and health repercussions associated to the coronavirus pandemic, stating this would enable Tunisia to clear up to 6.6 billion dinars.
“This amount represents 2.8 times the annual budget of the Health Ministry for 2020 (2.5 billion TND) or 13.8 times the annual budget of health institutions for 2020 (478 million TND),” emphasises the Observatory in a letter written on the occasion of World Health Day in assistance of the call by 100 international organisations to eliminate the external debt of developing countries.
According to the same source, this amount could back Tunisia face the economic consequences of COVID-19, which could amount to 6.6 billion TND, similar to the external debt service during the year 2020.
The Observatory called in this regard for a “permanent cancellation of all external debt payments due in 2020 by developing countries, without accumulation of interest and without penalties.”
He added that it should implement to all creditors, including bilateral, multilateral and private lenders so that the money freed up is used to support the fight against the pandemic and not to pay off other debts.
According to the Observatory, “Permanent cancellation of future debt payments would be the quickest way to free up existing public resources to stem this unprecedented crisis and save lives.
The suspension of debt payments for the poorest countries requested by the IMF and the World Bank will not achieve this objective if it does not apply equally to all lenders and only postpones payments.”