Many of the countries walloped by Covid-19 are also facing debt crises now.
So, the International Chamber of Commerce (ICC), the International Trade Union Confederation (ITUC), and Global Citizen have called for comprehensive emergency debt relief for the world's most vulnerable countries to enable them to combat Covid-19.
The global organisations teamed up to publish an open letter on July 16.
The letter – on behalf of businesses, workers and civil society globally – is addressed to the Group of 20 (G20) – the world's major economies.
In the letter, the organisations called on the G20 finance ministers to suspend debt service for the world's most vulnerable countries.
Sovereign debt is credit – usually in the form of bonds or syndicated loans – that a government owes to its creditors.
The letter called on the finance ministers of these countries to build on previous efforts to deliver a truly comprehensive sovereign debt package.
It came ahead of an online meeting of G20 finance ministers – the G20 Finance Ministers and Central Bank Governors meeting – to be held on July 18.
Also, the letter followed a previous joint letter sent in April, which called on the G20 governments to "take the international debt out of the equation in the fight against Covid-19," ahead of the Spring Meetings of the World Bank Group and the International Monetary Fund (IMF).
Earlier, in April, the G20 and the Paris Club of creditors "announced a freeze in debt service payments for the world's 73 poorest countries, through to the end of 2020."
This initiative, the Debt Service Suspension Initiative (DSSI), "will do much to safeguard the lives and livelihoods of millions of the most vulnerable people," the World Bank said.
Making the case for expanding the DSSI just three months after its creation, the three global organisations pointed to the worsening economic outlook for the global economy.
They also shed light on the growing concern that debt burdens may compromise efforts to contain the pandemic and keep local economies afloat.
So, the global organisations maintained that "more steps are still needed, including an extension of the DSSI through to the end of April 2022."
"Removing the spectre of sovereign debt from pandemic containment and the economic crisis is an absolute imperative to business, workers and citizens throughout the world," the letter highlighted.
"The required investment from the world's leading economies is minute compared to the social and economic costs of inaction," it continued.
The letter also called for the world's major economies to boost contributions that will enable the IMF to keep providing debt service relief for the poorest countries until the end of April 2022.
It also recommended broadening the scope of the DSSI to include lower-middle and middle-income countries based on their debt and health vulnerabilities.
Also, the letter noted "the commitment made by several governments to replenish the IMF Catastrophe Containment and Relief Trust (CCRT), and Poverty Reduction and Growth Trust."
The ICC is the institutional representative of over 45 million businesses while ITUC is the global voice of the world's working people. Meanwhile, Global Citizen is a movement of engaged citizens using their collective voice to end extreme poverty by 2030.