NEW YORK (Reuters) – The world’s poorest countries could save over $12 billion (9.71 billion pounds) owed to sovereign and other creditors this year through their participation in a debt-relief program, with Angola alone saving some $3.4 billion, according to estimates published Friday in a new database from the World Bank.
The savings under the COVID-19-linked Debt Service Suspension Initiative (DSSI) will be short-term, since the initiative only provides for suspension of debt payments through the end of the year. It postpones those payments until a later date but does not cancel them outright.
The second-largest saver among eligible DSSI countries would be Pakistan, with $2.4 billion, followed by Kenya with $802 million, according to the data.
In terms of savings compared with gross domestic product, Bhutan would reap the most benefits from the plan with 7.3% of GDP savings, followed by Angola at 3.7% and Djibouti at 2.5%.
Besides each country’s estimated savings, the database includes details on debt owed to multilaterals like the International Monetary Fund as well as on official and non-official bilateral debt disbursed and debt service due per year.
IMF and World Bank officials have warned that the COVID-19 pandemic will hit developing and emerging markets particularly hard given high levels of debt, sharp drops in oil and other commodity prices and insufficient healthcare systems.
