International cooperation for sustainable development may suffer from additional funding problems due to the consequences of the COVID-19 pandemic. Support for investments, so essential for development, can be relaunched in line with the Sustainable Development Goals (OSS/SDGs) on the initiative of the Italian Presidency of the G20 in 2021, to be built on the extension of the suspension of payments (DSSI ) already decided by the G20.

The G20 RELEASE initiative represents a proposal for the flexible conversion, total or partial, of sovereign debt with the creation, by the debtor country, of a counterpart fund in local currency, aimed at sustainable development – SDG Fund / OSS Fund – with endowments nominally equivalent to the values ​​of existing debt payments.

The goal is to promote the achievement of the SDGs by the most fragile countries that are facing the economic crisis caused by the pandemic, which is amplifying the structural fragility caused by inequalities and underdevelopment, favoring sustainable investmentsin the medium and long term in resilient structures and services, both on public initiative and with incentives for the private sector. The promotion of investments, especially in developing countries with a high demographic potential such as on the African continent, can stimulate economic growth, encourage trade, ensure services and create stable jobs. Therefore, it is necessary to resort to debt reduction and restructuring to prevent the spread of economic default situations and to promote recovery investments aimed at the SDGs.

Debt swaps should be gradual so as to increase the leverage and impact over time in line with country policymaking. Indebted countries would reduce government spending on debt servicing in return for committing to invest the equivalent amount in local currency in their economies, according to an agreed timeline.

This conversion should go hand in hand with the adjustment of development aid (ODA), through combined solutions, with blending tools , in order to ensure levels of growth, create decent jobs and achieve higher levels of sustainability. The increased mobilization of resources and tools will in any case have to be additional to the commitments for ODA , which continues to be an essential tool mainly for the least developed countries and which therefore must not be reduced.

The advantages of converting debts into local investment funds are clearly understandable. In particular, it allows for the planning and implementation of immediate projects in line with the SDGs, strengthens the ownership of the respective countries and the assumption of responsibility in the management of funds and in the development of administrative capacity; more easily convinces creditors to maintain and strengthen relations with these countries.

At the country level, all resources thus generated by the RELEASE decisions of the G20 countries, the EU, the IMF, the WB and other International Financial Institutions will be channeled into an OSS Counterpart Fund aimed at online local currency investments with the SDGs , as well as with the country’s development plan and, if in Africa, the Agenda of the African Union 2063, with measurable impacts on the specific targets of the SDGs. The Fund will either finance these investments or be used as collateral to leverage other funds or investors, primarily for private investment, with the overall objective of creating decent jobs and sustainable development.

The OSS Fund managed at government level, country by country, with the supervision of the Ministry of Finance and the involvement of the ministries concerned and civil society organizations, will be equipped with a monitoring mechanism, so as to ensure transparency, accountability and effectiveness of the interventions . It will have to be negotiated on the basis of current practices and with modalities agreed with the creditor countries. The G20 could provide guidance on governance, to be adapted on a case-by-case basis taking into consideration the number of creditor countries participating in the SDG National Fund.

The conditions attached to the funding should be simple, transparent and easy to monitor by all institutions involved . The monitoring and clarity of the criteria for the use of the Fundsthey will be particularly important given the need to re-establish the discipline and good practice of debt swaps; in particular, high debt concerns countries whose leadership must gain trust and credibility. Creditors could be attracted by the idea of ​​converting irrecoverable assets into funds that could constitute a step towards the sustainability of a given country, with the guarantee of a certain degree of monitoring. The trade and purchase of arms as well as the violation of human rights should be seen as an impediment to debt relief. Another aspect to take into consideration is the commitment to achieve greater climate resilience and neutrality as an incentive to strengthen the content of RELEASE G20.

In the spirit of flexibility of the G20 RELEASE, in the case of particularly fragile, highly indebted countries with unsustainable debt levels due to the consequences of the pandemic, a total or partial debt cancellation remains the most desirable option.

RELEASE G20 could represent the winning proposal of the G20 to the international community to find a long-term agreement for the reduction of the debt burden and for the identification of a process of systematic and sustainable restructuring of sovereign debt in the most indebted most fragile countries, together with investments in the SDGs. The initiative would have a strong impact both at the political level, as a fundamental step in the implementation of the “Financing for Development” commitments, and at the planning and operational level in the field of international cooperation, for a debt restructuring that is fair, regular, timely and effective and enables countries to invest in the SDGs, as set out in the Addis Ababa Agenda

International cooperation for sustainable development may suffer from additional funding problems due to the consequences of the COVID-19 pandemic. Support for investments, so essential for development, can be relaunched in line with the Sustainable Development Goals (OSS/SDGs) on the initiative of the Italian Presidency of the G20 in 2021, to be built on the extension of the suspension of payments (DSSI ) already decided by the G20.

The G20 RELEASE initiative represents a proposal for the flexible conversion, total or partial, of sovereign debt with the creation, by the debtor country, of a counterpart fund in local currency, aimed at sustainable development – SDG Fund / OSS Fund – with endowments nominally equivalent to the values ​​of existing debt payments.

The goal is to promote the achievement of the SDGs by the most fragile countries that are facing the economic crisis caused by the pandemic, which is amplifying the structural fragility caused by inequalities and underdevelopment, favoring sustainable investmentsin the medium and long term in resilient structures and services, both on public initiative and with incentives for the private sector. The promotion of investments, especially in developing countries with a high demographic potential such as on the African continent, can stimulate economic growth, encourage trade, ensure services and create stable jobs. Therefore, it is necessary to resort to debt reduction and restructuring to prevent the spread of economic default situations and to promote recovery investments aimed at the SDGs.

Debt swaps should be gradual so as to increase the leverage and impact over time in line with country policymaking. Indebted countries would reduce government spending on debt servicing in return for committing to invest the equivalent amount in local currency in their economies, according to an agreed timeline.

This conversion should go hand in hand with the adjustment of development aid (ODA), through combined solutions, with blending tools , in order to ensure levels of growth, create decent jobs and achieve higher levels of sustainability. The increased mobilization of resources and tools will in any case have to be additional to the commitments for ODA , which continues to be an essential tool mainly for the least developed countries and which therefore must not be reduced.

The advantages of converting debts into local investment funds are clearly understandable. In particular, it allows for the planning and implementation of immediate projects in line with the SDGs, strengthens the ownership of the respective countries and the assumption of responsibility in the management of funds and in the development of administrative capacity; more easily convinces creditors to maintain and strengthen relations with these countries.

At the country level, all resources thus generated by the RELEASE decisions of the G20 countries, the EU, the IMF, the WB and other International Financial Institutions will be channeled into an OSS Counterpart Fund aimed at online local currency investments with the SDGs , as well as with the country’s development plan and, if in Africa, the Agenda of the African Union 2063, with measurable impacts on the specific targets of the SDGs. The Fund will either finance these investments or be used as collateral to leverage other funds or investors, primarily for private investment, with the overall objective of creating decent jobs and sustainable development.

The OSS Fund managed at government level, country by country, with the supervision of the Ministry of Finance and the involvement of the ministries concerned and civil society organizations, will be equipped with a monitoring mechanism, so as to ensure transparency, accountability and effectiveness of the interventions . It will have to be negotiated on the basis of current practices and with modalities agreed with the creditor countries. The G20 could provide guidance on governance, to be adapted on a case-by-case basis taking into consideration the number of creditor countries participating in the SDG National Fund.

The conditions attached to the funding should be simple, transparent and easy to monitor by all institutions involved . The monitoring and clarity of the criteria for the use of the Fundsthey will be particularly important given the need to re-establish the discipline and good practice of debt swaps; in particular, high debt concerns countries whose leadership must gain trust and credibility. Creditors could be attracted by the idea of ​​converting irrecoverable assets into funds that could constitute a step towards the sustainability of a given country, with the guarantee of a certain degree of monitoring. The trade and purchase of arms as well as the violation of human rights should be seen as an impediment to debt relief. Another aspect to take into consideration is the commitment to achieve greater climate resilience and neutrality as an incentive to strengthen the content of RELEASE G20.

In the spirit of flexibility of the G20 RELEASE, in the case of particularly fragile, highly indebted countries with unsustainable debt levels due to the consequences of the pandemic, a total or partial debt cancellation remains the most desirable option.

RELEASE G20 could represent the winning proposal of the G20 to the international community to find a long-term agreement for the reduction of the debt burden and for the identification of a process of systematic and sustainable restructuring of sovereign debt in the most indebted most fragile countries, together with investments in the SDGs. The initiative would have a strong impact both at the political level, as a fundamental step in the implementation of the “Financing for Development” commitments, and at the planning and operational level in the field of international cooperation, for a debt restructuring that is fair, regular, timely and effective and enables countries to invest in the SDGs, as set out in the Addis Ababa Agenda

RELEASE G20, LEGGI LA SINTESI IN ITALIANO

RELEASE G20, ENGLISH SUMMARY PROPOSAL

RELEASE G20, SYNTHÈSE EN FRANÇAIS