IMF chief calls for ‘faster, more efficient’ plan for debt relief amid pressure on China to ease distress
- International Monetary Fund (IMF) managing director Kristalina Georgieva spoke about global debt restructuring at the Boao Forum for Asia on Thursday
- According to a report by US agency Fitch Ratings, a record number of countries – Belarus, Lebanon, Ghana, Sri Lanka and Zambia – are all in sovereign default
Vulnerable countries urgently need a faster and more efficient process to restructure debts, said the head of a major international financial institution, amid criticisms over China’s role in debt relief as sovereign defaults have reached a record high.
Speaking at the Boao Forum for Asia on China’s Hainan island on Thursday, International Monetary Fund (IMF) managing director Kristalina Georgieva highlighted the hardships endured by people in low-income and vulnerable countries over the past three years.
Georgieva urged governments to provide fiscal support to groups in need and those affected by food insecurity and the rising cost of living, while also stressing the need for countries in relatively stronger positions to help the vulnerable members in the global community.
With interest rates high and many currencies depreciating, this is particularly important for countries in debt distress
“With interest rates high and many currencies depreciating, this is particularly important for countries in debt distress. We urgently need faster and more efficient global mechanisms for providing debt treatments to these countries,” Georgieva said.
She added that China’s engagement in the Common Framework, a mechanism set up in November 2020 to make it easier for 73 low-income countries to achieve debt relief, and participation in the new Global Sovereign Debt Roundtable are “very much welcome”.
China has been blamed for its opaque lending practices to low-income countries over costly projects, as well as delaying debt restructuring efforts led by the IMF.
