International Monetary Fund Managing Director Kristalina Georgieva has called for a timely resolution of Sri Lanka’s debt restructuring.
She said that timely and orderly processes are needed both for countries under the Common Framework (CF) for debt resolution and for those not covered by it, including Sri Lanka and Suriname.
Georgieva made the statement the first meeting of the G20 Finance Ministers and Central Bank Governors in Bengaluru, India.
“In light of rising debt vulnerabilities in many countries, I strongly endorse efforts to strengthen the debt architecture and improve the speed and effectiveness of debt resolution. Sovereign debt vulnerabilities, already elevated before the pandemic, have been exacerbated by the shocks stemming from Covid-19 and Russia’s war against Ukraine. This is particularly the case for developing and low-income countries with very limited policy space and huge development needs,” she said.
Georgieva said that it is imperative for the G20 to strengthen the debt architecture.
The G20 did so in 2020 with the Debt Service Suspension Initiative (DSSI) and by establishing the Common Framework (CF) for debt resolution.
“Since then, the CF delivered a debt operation for Chad. It is now critical to complete Zambia’s debt restructuring, establish a Creditor Committee for Ghana, and advance work with Ethiopia. Nonetheless, more predictable, timely, and orderly processes are needed both for countries under the CF and for those not covered by it, including Sri Lanka and Suriname,” Georgieva added.
Georgieva said that there needs to be enhanced dialogue and collaboration on debt issues and the goal of the new Global Sovereign Debt Roundtable (GSDR) is to bring together creditors—official, old and new, and private—and debtor countries to discuss key issues that can facilitate the debt resolution process.
“We launched the GSDR under the auspices of India’s G20 presidency last week at the deputies’ level, followed by an engaged and constructive principals meeting earlier today. We will further build on this discussion during the World Bank-IMF Spring Meetings in April,” she said.
Georgieva said that the common interest is to secure a well-functioning and integrated global economy, for the sake of a more secure and prosperous world. (Colombo Gazette)
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