Debt Service Suspension Initiative (DSSI)
A moratorium decided by the G20 in April 2020 that allowed the poorest countries to suspend payments on their official bilateral debt during the pandemic.
In spring 2020, low income countries saw their exports, their remittances from workers abroad and their market access collapse at once, just as the pandemic called for health spending. The DSSI allowed them to temporarily suspend debt service to official bilateral creditors, the suspended amounts remaining due and to be repaid later, with no reduction in net present value. It therefore addressed liquidity, not solvency, which led to the Common Framework afterward. Private creditors were invited to participate but hardly did, and some countries chose not to apply so as not to worry markets and rating agencies.
Between May 2020 and December 2021, 48 of the 73 eligible countries took part in the initiative, which suspended about 12.9 billion dollars of debt service according to the World Bank, a modest share of what they owed to all their creditors.
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