admin The growing debt problems of the poor countries will be resolved by the world bank along with the International Monetary Fund. They will present concrete proposals to address some of the biggest restructuring roadblocks at this week’s Spring Meetings. A meeting led by the Bretton Woods institutions and Group of 20 chair India in Washington, DC is where the ideas to speed up the process will be introduced at the Global Sovereign Debt Roundtable, President David Malpass said in a blog post on Sunday.
According to a newsletter, one proposal is to share the joint World Bank-IMF debt sustainability analysis for nations with all creditors involved in discussions at the same time, with increased transparency and information sharing helping to calculate the size of debt relief needs, Malpass said. China, the biggest sovereign creditor to developing nations, has raised questions about the institutions’ assumptions, slowing the process.
By creating clear timelines for steps including the formation of creditor committees, restructuring and the provision of financing assurances and the signing of the actual restructuring agreements would be strengthened and accelerated, Malpass Added. Suspending debt service payments at the start of the process also would give incentives for reaching a deal and protect debt repayment ability, he said.
Malpass said the Zambia official creditor committee, led by China and France, plans to meet the week of April 16, and that he’s looking for a “good outcome.” On Ghana, he said the advance of technical meetings is a positive sign, and highlighted the need for faster progress on Ethiopia. “With the debt crisis growing larger, we must approach the meetings in the week ahead with resolve and urgency,” Malpass said. “Now is the time for all parties to turn words into action.”
But despite the G-20 largest economies having agreed in 2020 to a plan called the Common Framework to smooth the process of restructuring loans that governments could no longer afford to service or repay, not a single nation has actually gotten relief under it so far, more than half of the world’s low-income countries are at high risk of debt distress or already in it.
Delays have partly stemmed from disagreements between the rich countries that have traditionally guided sovereign debt restructurings and China, which is now a major international creditor.
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