Prime Minister Narendra Modi called the debt crisis a matter of great concern for the world, especially for developing countries. The Indian PM said that India hopes to build consensus at the upcoming G20 summit, to be hosted in New Delhi, to create a framework to help low-income economies ridden by debt.
The PM said that India’s G20 presidency has helped highlight the need to address the global challenges posed by the debt crisis facing the world, especially for countries in the Global South, during an exclusive interview to PTI last week.
Modi added, “The debt crisis is indeed a matter of great concern for the world, especially developing countries. Citizens from different countries are keenly following the decisions being taken by governments in this regard. There are some appreciable results too.”
Elaborating on the results, he noted that countries that have suffered a debt crisis or are going through it currently, have started prioritising financial discipline. He added that other countries are cautious to avoid making the same mistakes that landed some nations in the debt crisis.
Notably, India has used it’s G20 presidency to highlight the need to build a framework on debt restructuring to aid nations facing huge debt issues. Meanwhile, China, thought to be the largest sovereign creditor worldwide, has displayed some reluctance to certain ideas on debt restructuring, but an increasing number of member countries are coming forward to lend a helping hand to low-income countries dealing with the crisis, the report noted.
About more than 70 less-affluent nations are going through a collective debt burden of $326 billion, the report stated citing estimates. The PM noted that G20 finance ministers and central bank governors have addressed the progress made in debt treatment for common framework countries and also beyond the framework.
“We have also been greatly sensitive to the needs of our valued neighbour, Sri Lanka, during their tough times,” Modi said. Further, to take ahead debt restructuring efforts at the global level, the Global Sovereign Debt Roundtable was launched earlier this year. The roundtable is a joint initiative of the IMF, World Bank, and the G20 Presidency.
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The PM noted that these efforts will help boost communication between major stakeholders and help treat debt effectively. PM Modi remained optimistic that increasing awareness among the public will ensure that such situations don’t repeat themselves. He added, “While a lot is being done to address these issues, as I said earlier, I am positive that rising awareness among the people of different countries will ensure that such situations don’t recur often.”
Earlier in July, IMF chief Kristalina Georgieva called for a swift debt restructuring process for fragile and vulnerable countries.