Key challenges to world economic outlook discussed
WASHINGTON, D.C. (TIP): Union Finance Minister Nirmala Sitharaman on Thursday, April 13, called for timely debt restructuring as a solution to the global debt crisis, stressing it was closely intertwined with addressing the global poverty challenge. Addressing the second G20 meeting of Finance Ministers and Central Bank Governors on the first day, Sitharaman noted that the crisis adversely affected countries most in debt as these also housed the poorest people, according to tweets posted by the Ministry of Finance.
Sitharaman is co-chairing the two-day meeting with Reserve Bank of India Governor Shaktikanta Das in Washington. The meeting also discussed key challenges to the global economic outlook and explored possible areas of policy coordination on pressing global issues, besides exchanging views on accelerating progress on deliverables envisioned during the G20 India presidency.
As a priority for India’s G20 Presidency, she said there is a need to augment present global efforts, including those of the G20, to address growing debt distress across the globe.
Sitharaman stressed on debt transparency and information-sharing as well as clarity on the comparability of treatment, predictability and timeliness of the debt restructuring process, including those for steps involved in the process and ways to assess and enforce. Discussions focused on the actions that can be taken now to accelerate debt restructuring processes and make them more efficient, including under the G20 Common Framework, according to a statement issued by the roundtable, .
“We agreed on the importance to urgently improve information sharing including on macroeconomic projections and debt sustainability assessments at an early stage of the process. The IMF and World Bank will rapidly issue staff guidance on information sharing at each stage of the restructuring process,” it said.
“The meeting discussed the role of Multilateral Development Banks (MDBs) in these processes through the provision of net positive flows of concessional finance. The International Development Association’s (IDA) provision of positive net flows and the ex-ante implicit debt relief through increased concessionality and grants to countries facing higher risks of debt distress was welcomed,” the statement said.
To clarify key concepts to support predictability and fairness of debt restructuring processes, a workshop will be organized in the coming weeks on how to assess and enforce comparability of treatment, it said.
“Moreover, further work will be undertaken on principles regarding cut-off dates, formal debt service suspension at the beginning of the process, treatment of arrears, and perimeter of debt to be restructured, including with regard to domestic debt,” the statement said.
This work will also help in clarifying potential timetables to accelerate debt restructurings, it said.
(With inputs from ANI, PTI )