G20 agrees that debt restructuring must be speedily dispensed with: FM Sitharaman

Indian Finance Minister Nirmala Sitharaman speaks at the G20 press briefing during the International Monetary Fund (IMF) and World Bank Spring Meetings at IMF headquarters in Washington, DC. Pic/AFP

Debt restructuring and resolution are urgent issues for many low and middle income nations, and the G20 agrees that these matters must be speedily dispensed with, Union Finance Minister Nirmala Sitharaman has said. She told a press conference here on Thursday that discussions of G20 countries and multiple stakeholders on these issues on the sidelines of the annual spring meeting of the IMF and the World Bank were to ensure that resolution for countries in debt should happen in time. Representatives of some of the countries facing debt such as Sri Lanka, Zambia, Ghana and Ethiopia were present for the discussions.

The finance minister said the Global Sovereign Debt Roundtable, held on Wednesday, has also brought in a certain avenue for people to talk about how they will have to work towards addressing debt distress and amid an emerging global debt landscape, Sitharaman said. Zambia did mention that it had applied almost a year and a half ago for debt resolution and is still waiting. "That point that it is a very time consuming process and even when the IMF (International Monetary Fund) says it is all right, we are handling your affair, it does take time after that as well," she said.

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The minister said G20 countries recognise the urgency to address vulnerabilities as well as strengthen multilateral coordination towards countering the increasing debt distress in low-income and middle-income countries. To a question, Sitharaman said, "We found that almost all of them, inclusive of creditors, public creditors, private, all of them said it has to be addressed at the earliest. So, I think even the country that you named China had all agreed that it has to be speedily dispense with that as a greater step forward".

"Because once you recognise that you have to do it in time and at the earliest, it moves faster. I expect the resolution for many of these countries, I named a few, maybe there are a few others I didn't name, will have their resolutions done at earliest," Sitharaman said. The Global Sovereign Debt Roundtable was held by the IMF, the World Bank and India that holds the G20 presidency. "There has been absolutely positive discussion going on. There was one held much before we met in Bengaluru. All stakeholders in debt distress related matters were there, private participants were also there, affected countries which have been waiting for one or two years and some others who are now getting relief were also present," the minister said. So, this discussion seems to have gone in a very positive note and "you mentioned China, but I thought in the meeting, all were positively engaged", she said.

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