In this undated file photo, International Monetary Fund Managing Director Kristalina Georgieva, speaks at an event at the global lender’s headquarters ahead of the annual meetings of the IMF and the World Bank. (ZHAO HUANXIN / CHINA DAILY)

WASHINGTON - Some of the world’s poorest countries are reluctant to seek debt relief under a program backed by the Group of 20 major economies out of concern it could harm their credit ratings and future market access, the head of the International Monetary Fund (IMF) said.

The program was intended to ease the economic impact of the pandemic on the world’s poorest countries, many of which lack good health system and have high debt levels. However, the terms of the G20 debt relief also limit the amount of non-concessional debt that countries can raise during the suspension period, potentially curbing access to capital markets

Managing Director Kristalina Georgieva told Reuters she was not pushing countries to seek suspension of debt payments from official bilateral creditors, but wanted them to have the option to free up funds to fight the new coronavirus pandemic.

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The G20 in April backed the debt relief proposal championed by Georgieva and World Bank President David Malpass, and a group of private creditors recommend their members participate, but interest has been tepid.

Of 77 countries that are eligible for such debt relief, only 22 have requested forbearance thus far, an IMF spokesman said.

The Paris Club of creditor nations on Monday said it had agreed to suspend debt service payments from Mali and the Caribbean island of Dominica as part of the G20 debt relief deal, the first two countries to benefit.

Pakistan’s de facto Finance Minister Abdul Hafiz Shaikh said in early May that Islamabad had also applied for debt relief offered by the G20, and would seek to defer a payment of around US$1.8 billion for Pakistan for one year.

Kenya’s finance minister on Friday said his country would not seek a suspension of debt payments because the terms of the deal were too restrictive, and he was concerned about the effect debt relief might have on Kenya’s credit rating.

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The program was intended to ease the economic impact of the pandemic on the world’s poorest countries, many of which lack good health system and have high debt levels.

However, the terms of the G20 debt relief also limit the amount of non-concessional debt that countries can raise during the suspension period, potentially curbing access to capital markets.

The World Health Organization has warned COVID-19, the respiratory disease caused by the new coronavirus, could infect between 29 million and 44 million people in Africa this year if it is not contained, meaning already weak healthcare systems could be overwhelmed. Food security is another concern given devastation caused by swarms of locusts in eastern Africa.

But emerging market asset managers working with heavily-indebted African countries have argued that blanket debt relief by private creditors would put African countries’ access to capital at risk.

Georgieva said the leaders of some eligible countries had written to her expressing concerns, but did not name any. She said it was a sovereign decision whether countries participated.

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“I actually would not urge countries to participate in debt relief initiatives if they think it is in their best interest not to participate,” she told Reuters in an interview.

“We make it possible, and then countries have to assess the pro and cons of participation. For some countries, the concern is that if they were to go for debt relief, that may impact their credit rating and access to markets.”

Georgieva acknowledged there had also been no demand thus far for a new short-term liquidity line set up by the IMF this month. She said she was not surprised given that it was intended for the best performing countries and only offered 145 percent of a country’s quota with the Fund.

Peru and Chile had opted to tap the IMF’s precautionary Flexible Credit Line instead, she said, giving them access to larger amounts of money, but could segue later to the new short-term instrument.

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“My interest was to make sure the Fund has everything that can help countries, and it was very clear that we were lacking an instrument that doesn’t lock in a big chunk of Fund resources for a long period of time,” she said. “Sooner or later there will be usage.”