Commercial creditors owed money by poor countries should only be eligible for government Covid-19 bailout cash if they agree to sign up to a comprehensive global debt deal, the head of one of the world’s leading charities has said. Despite signs that the G20 group of developed and developing nations are edging towards an agreement on help for the most vulnerable nations, Inger Ashing, chief executive of Save the Children International said the plan would only be fully effective if it included the private sector. Ashing said in an open letter to the G20 that commercial creditors, such as banks, commodity traders and asset management firms, accounted for almost half the $62bn (£42.2bn) debt payments due to be made by the world’s 75 lowest-income countries in 2020. G20 governments are expected to suspend debt payments for six months in a virtual meeting on 15 April, but Ashing said this did not go far enough. Allowing commercial creditors an exemption from any debt-relief initiative would be the “financial equivalent of pouring water into a bucket with large holes”, he said. “Official creditors should make it clear that they expect commercial creditors to apply comparable treatment. If necessary, governments should encourage participation by making access to special Covid-19 financing programmes conditional on commercial creditors participating in the debt standstill,” she said. Ashing said that without a comprehensive plan there was a “real and present” danger of a lost decade for development, marked by the reversal of gains achieved in health, nutrition, education, poverty reduction, and other goals over the past 30 years. The International Monetary Fund and the World Bank, which hold virtual meetings this week, have been pressing sovereign creditors to agree debt relief. Using money provided by Japan and the UK, the IMF said on 13 April it would cancel $215m of debt payments for 25 countries over the next six months. Nadia Daar, head of Oxfam International’s Washington DC office, said the IMF should sell some of its gold reserves, which have risen in value by $20bn since the start of the Covid-19 crisis, to fund a more generous package. “Poor countries with fragile health systems are drowning in debt. With gold prices hitting a seven-year high, the IMF should use the windfall profits from gold sales for debt cancellation to avert catastrophic loss of life in developing countries,” Daar said. Sarah-Jayne Clifton, director of Jubilee Debt Campaign, said: “The IMF’s announcement is very welcome. This debt cancellation helps keep money in countries so it can be used for urgent health spending and social protection. Crucially, the payments are being cancelled rather than rolled into the future. “However, the scale of the economic crisis faced by developing countries requires the IMF to go much further. The IMF is sitting on $27bn of reserves and over $135bn of gold. It can afford to cancel more debt, and now is the time to do it. We need the cancellation of payments to be extended to a much bigger group of developing countries and be for the next full year. “Beyond the IMF, debt cancellation needs to cover payments to all creditors, including the private sector, alongside the commencement of a process to work out how to bring debts down to a sustainable level once the crisis is over.”