The International Monetary Fund announced on Monday that representatives from China, India, Saudi Arabia, and the Group of Seven countries will take part in the inaugural virtual meeting of the new sovereign debt roundtable on Friday.
Officials from middle-income nations like Sri Lanka, Suriname, and Ecuador, which have experienced their own debt crises, as well as countries like Ethiopia, Zambia, and Ghana, which have asked for debt treatment under the Group of 20 common frameworks, will also be present at the roundtable, according to three sources. One of the sources claimed that Brazil, which will preside over the G20 next year, is also participating.
Brief about G20 summit
The G20 (Group of Twenty) is an international forum for the governments and central bank governors from 19 countries and the European Union. The G20 summit is an annual meeting where leaders of these member countries discuss and coordinate a range of economic and financial issues, such as global economic growth, trade, and financial market regulation. The G20 member countries represent over 80% of the world’s GDP, two-thirds of the world’s population, and three-quarters of global trade.
The last two G20 summits were:
The 2020 G20 Riyadh summit, was presided over by Saudi Arabia. The 2021 G20 Rome summit, was presided over by Italy.
The main objectives of the last two G20 summits were:
2020 G20 Riyadh summit: The summit’s main objective was to discuss and coordinate a global response to the COVID-19 pandemic, including issues related to public health, the global economy, and international trade.
2021 G20 Rome summit: The summit’s main objective was to discuss and coordinate strategies to promote a sustainable and inclusive recovery from the COVID-19 pandemic, focusing on issues such as climate change, the digital economy, and global supply chains. Additionally, the summit aimed to address global challenges such as food security, education, and gender equality.
The first roundtable meeting will take place on Friday, according to an IMF representative, who also promised that further information would be made public soon.
The goal, according to them, is to bring together important parties involved in restructuring sovereign debt, including traditional creditors from advanced economies and new creditors like China, Saudi Arabia, and India as well as the private sector and debt-susceptible nations, in order to address the current shortcomings.
According to one of the sources, the roundtable will feature the Paris Club of official creditors as well as representatives from the private sector, including the Institute of International Finance (IIF), the International Capital Markets Association, and two private financial institutions that have requested anonymity.
The body was established amid mounting resentment over the sluggish progress of discussions regarding debt relief for Zambia, which first requested assistance two years ago. The roundtable, according to its organizers, won’t concentrate on Zambia or any other particular examples but could help settle problems in general.
By the end of the year, officials seek to allay China’s worries about cutoff dates that would shield new finance from debt restructuring. Officials from the G7, the International Monetary Fund, and the World Bank have long advocated for quicker and more comprehensive debt relief programs for deeply indebted countries in order to prevent social service cuts that they worry could spark social upheaval.
A small brief about G7 summit
Seven of the world’s most developed economies—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States—combine to form the G7 (Group of Seven). The G7 was first established to coordinate economic strategies among its members, but as time has gone on, its focus has widened to encompass a variety of global challenges, including climate change, international security, and development. The G7 summit is an annual gathering of these leaders where they cooperate and debate a variety of subjects. The G7 nations, which account for around 40% of global GDP, frequently work closely with other international institutions including the World Bank and the United Nations.
objectives of the last two G7 summits
The following goals were set for the United Kingdom’s 2021 G7 Cornwall summit:
To plan the global distribution of vaccines and pandemic preparedness in response to the COVID-19 pandemic.
To talk about methods for fostering economic expansion and resilience, such as international commerce, green growth, and infrastructure investment. to address issues like gender equality, biodiversity loss, and climate change.
France hosted the 2019 G7 Biarritz conference, which aimed to accomplish the following:
To encourage equitable economic growth and lessen inequality, notably by implementing policies like social protection and tax reform.
To address issues including cybersecurity, biodiversity loss, and climate change.
To advance a rules-based international order and strengthen global governance, especially by working with other international crises.
The current largest sovereign creditor in the world, China, is the main obstacle that U.S. Treasury Secretary Janet Yellen and other G7 representatives perceive in the way of expediting work on debt solutions. Additionally, they are urging G20 members to accept the expansion of the common framework to include middle-income nations.
According to Eric LeCompte, executive director of the Jubilee USA Network, a confederation of advocacy, development, and religious organizations, support for the issue is expanding in other nations. But he added that China’s and Russia’s objections continued to be a major “stumbling hurdle.”
The majority of nations support extending these policies to middle-income nations, but China presents the biggest obstacle, according to LeCompte, who also noted that Europe experienced a similar phase of reluctance on debt relief in the 1990s before changing its mind.
China’s repeated requests for the World Bank and other multilateral development banks to participate in debt declines will also be discussed. U.S. officials have vehemently rejected this proposal, arguing that these lenders already provide highly advantageous loans and grants to developing nations.