FM calls for concerted global efforts to restructure debt of poor nations

Union Finance Minister Nirmala Sitharaman on Friday flagged the need for the management of global debt vulnerabilities and called for concerted global efforts led by rich nations to help indebted countries deleverage at a time when multilaterism is the most potent challenge

The FM said India had demonstrated its commitment by voicing the concerns of the Global South and the country had also made significant efforts in providing momentum for debt treatment for some countries.

The international community should collaborate and find stronger ways to coordinate debt restructuring for low-income and vulnerable middle-income countries facing debt stress and vulnerabilities, the minister said in her virtual keynote address at a seminar on ‘Global Economy: Challenges, Opportunities and the Way Forward’.

This was jointly organised by the Department of Economic Affairs, Ministry of Finance, and the Reserve Bank of India under the aegis of Finance Track of India’s G20 Presidency.

Sitharaman said G20 also stresses the criticality of debt vulnerability in low- and middle-income countries through an effective, comprehensive, and systematic approach. By restructuring existing debts and enhancing access to affordable finance, the international community can contribute to releasing financial resources in debtor countries to shield vulnerable populations from economic hardships, she said.

The primary focus of the Indian G20 Presidency in 2023 has been to strengthen Multilateral Development Banks (MDBs) and address the shared global challenges of the 21st century which they are facing. But MDBs are also facing increasing demands from donor and borrowing countries to expand their lending operations beyond their core development mandates. However, MDBs are not currently equipped to address this rising demand for their resources adequately, she added.

Referring to digital public infrastructure, the minister said unlocking the full potential of digital progress for all was essential for a fair and inclusive future in this era of technological transformation. However, despite notable advancements, disparities in access, usage, and quality of financial services persist among vulnerable populations and micro, small, and medium enterprises.

G20 policy recommendations for advancing financial inclusions and productivity gains through DPI, meticulously developed under India's leadership, have garnered unanimous acceptance across G20 members, she added.