G20 leaders see worsening debt problems in some middle-income countries – draft

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WASHINGTON, Nov 15 (Reuters) – Leaders of the Group of 20 major economies will express concern over the “deteriorating debt situation” facing some vulnerable middle-income countries and call on all public and private creditors to respond quickly to debt processing requests. .

A draft G20 leaders’ statement seen by Reuters includes much stronger language on debt issues and acknowledges that the problems extend far beyond the poorest nations.

The draft emphasized the importance for all public and private creditors to participate in debt relief and to assume a fair burden. But he did not mention China, which has been criticized by Western countries and international financial institutions for delaying debt restructuring efforts.

The leaders said they would redouble their efforts to implement the Common Framework for Debt Treatment in a “predictable, timely, orderly and coordinated manner”, according to the draft.

The framework was created by the G20 and the Paris Club of official creditors at the end of 2020 to help low-income countries weather the COVID-19 crisis. However, the results have proven elusive and only three countries – Chad, Zambia and Ethiopia – have formally requested debt treatment under this framework.

G20 leaders also welcomed a debt deal reached by Chad’s creditors and encouraged the timely conclusion of debt treatment for Zambia by early 2023. They also encouraged the conclusion of debt treatment for Ethiopia under an IMF-supported program.

IMF and World Bank leaders, along with officials from the United States and other Western powers, unsuccessfully pushed to expand the G20 framework to include vulnerable middle-income countries, but that effort has stalled. by China, now the world’s largest sovereign creditor.

The draft declaration recognizes, for the first time, the seriousness of the debt problems facing middle-income countries, in what experts have called a clear benchmark for Sri Lanka, which reached a service-level agreement with the IMF in early September but must obtain financing assurances from several creditors, including China and Japan, to guarantee disbursements. Read more

Reporting by Andrea Shalal; Editing by Angus MacSwan and Chizu Nomiyama

Our standards: The Thomson Reuters Trust Principles.

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