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Mexico, Argentina urge debt relief for middle-income nations

·1-min read
An elderly woman waits to receive the Sputnik V coronavirus vaccine at Centenario Stadium in Quilmes, Argentina on April 1, 2021

Mexico and Argentina on Wednesday called for international debt relief for middle-income countries home to many of the people pushed into extreme poverty by the coronavirus pandemic.

The appeal came on the same day that G20 finance ministers and central bankers agreed to extend a moratorium on debt interest payments for the world's poorest nations.

Mexico and Argentina, both G20 members, said in a joint statement that middle-income countries were "forgotten" despite representing 75 percent of the world's population and 62 percent of those living in poverty.

While they have access to capital markets, such nations are not able to borrow at low interest rates, they said.

The statement called for middle-income nations to be able to take advantage of the International Monetary Fund's plan to increase its allocation of special drawing rights (SDR), a type of international reserve asset, by $650 billion.

Mexico and Argentina also proposed creating an international fund to facilitate the restructuring of middle-income countries' debts.

"This will prevent the health and economic crisis from turning into a debt crisis in the medium term," the statement said.

It cited the World Bank's estimate that the pandemic increased the number of people living in extreme poverty in 2020 by 120 million, mostly in middle-income nations.

Argentine President Alberto Fernandez has called his country's multibillion-dollar debt to the IMF "unpayable" in its original form.

nc/dr/bfm