“Release G20”, an important Italian proposal to qualify international cooperation and support the most fragile countries in their recovery plans from the pandemic crisis and to promote sustainable investments, was presented on 23 June 2021 at a webinar organized by “Link2007”, the coordination association of the most important and historic Non Governmental Organizations (NGOs) of our country in collaboration with the Ministry of Foreign Affairs and International Cooperation (MAECI).
Release G20, an Italian proposal to support the most fragile countries
«In the next three years – explained the president of “Link2007”, amb. Roberto Ridolf – the public debt of African countries will exceed 950 million dollars; for this reason we propose Release G20, which is based on the restructuring and therefore the reconversion of part of this debt into investments in local currency aimed at the Sustainable Development Goals. And we hope that this part is as large as possible ».
The challenge of canceling the debt in the context of the Italian presidency of the G20
The proposal, which was submitted for evaluation by the G20 under the Italian presidency, envisages a paradigm shift for international cooperation essential for reducing the socio-economic impact of debt, especially for low-income African countries . In expressing her support for the initiative, Deputy Minister Marina Sereni , who chaired the conference, explained that «Italy has an ambitious project, with a particular focus on African countries»: for this reason our country takes «the challenge to cancel the debt in the framework of the Italian presidency of the G20 » and to «restructure investments in order to be able to support the recovery after the pandemic has exacerbated many crises already underway. Reducing the debt of the poorest countries is a challenge that Italy does not shy away from, especially now that, with the Covid-19 crisis, it is becoming increasingly difficult, especially in Africa, to pursue the sustainable development goals set by the UN ». The Hon. Marina Sereni then recalled that the G20 under the Italian presidency has extended the temporary suspension of debt payments until 31 December 2021 “with the aim of avoiding a further increase in the human, economic and social costs of the pandemic” and that “ministers of G20 finances are working on financing strategies for sustainable development goals, thus accepting the proposals that emerge, as in the case of this meeting, from civil society organizations”.
The G20 under the Italian presidency has extended the debt suspension to the end of 2021
Diplomatic adviser Luigi Mattiolo , G20 Sherpa of the Italian prime minister, also confirmed on the occasion that the goal of debt relief is the object of particular attention also by the Presidency of the Council of Ministers.
A particular recognition of high value and prestige to the initiative promoted by “Link 2007” was expressed in particular by the representatives of African states, including Ibrahim Assane Mayaki, head of “NEPAD”, the development agency of the Union Africana according to which: « Debt restructuring can help Africa to go ahead in pursuing the Agenda of the United Nations Sustainable Development Goals in all key sectors. The continent loses about 90 billion a year due to illicit financial flows . This is why Release G20 is fundamental: today more than ever the sustainable development goals are important to achieve».
Release G20 proposes a flexible conversion of sovereign debt
Specifically, ” Release G20″ proposes a flexible conversion, total or partial, of sovereign debt by an African debtor state into a counterpart fund in local currency, aimed at promoting initiatives linked to the pursuit of sustainability objectives. This proposal would guarantee a reduction in the debt burden for the states in question and at the same time would favor the progress of the communities through the launch of resilient investments over the medium to long term . The Fund would be managed by the government of the individual state, which, in the absence of fiscal pressures due to debt, could see its ownership strengthened in favor of the immediate implementation of projects related to sustainable development objectives.
In order to ensure compliance with the principles of transparency, effectiveness and accountability , the “G20 Release” proposes to promote, in parallel, the use of effective monitoring mechanisms , the definition of the methods for exercising supervision by the state finance ministry concerned, the involvement of other competent ministries and civil society organizations . This set of tools and procedures is proposed with the aim of strengthening the administrative and operational capacities of African states in the use of Funds established on the basis of debt conversion.
Release G20, a common vision oriented towards the principles of equity and sustainability
According to the “G20 Release”, the transformation of sovereign debt into investments for the socially sustainable post-Covid-19 recovery would be desirable not only from a political perspective of strengthening collaboration between states but would also allow international cooperation to be qualified with the launch of an effective planning of new investments guided by the principles of equity and sustainability . According to the president of the “Development” working group of the Italian presidency of the G20, Marco Ricci, this will require the willingness to operate according to “a common vision” but also the ability to promote a review of the current sustainable development plans by the lending countries .
*Eurispes, Dept. International – LUMSA University