G30 calls for urgent, concerted efforts to tackle debt crisis

The G30 has said that rising debts have threatened funding for development priorities and called for urgent policy response to support the most vulnerable countries.

The G30, established in 1978, is an independent global body comprising economic and financial leaders from the public and private sectors and academia, reports Xinhua news agency.

The international response to the ongoing pandemic in middle- and low-income countries pales by comparison to the domestic policy response in advanced economies, former US Treasury Secretary Lawrence Summers, co-chair of the working group’s steering committee, said in a webinar on Wednesday.

Summers, who is also a professor at the Harvard University, noted that new creditors represent the bulk of debt payments from low-income countries in the wake of the pandemic shock.

Adapting the international financial architecture to these and other new stakeholders will take time, but urgent responses to the pandemic cannot wait for this process to run its course, according to the report, which called on the international community to adapt system to ensure proper role for the new creditors.

The G30 urged the International Monetary Fund (IMF) to mobilize global liquidity on a larger scale than ever before, scale up its crisis lending in low-income countries, and use far more of its existing non-concessional resources to mitigate economic fallout from Covid-19.

Debt relief and supporting the poorest are among the issues being discussed during the ongoing virtual annual meetings of the IMF and World Bank Group, which runs from October 12 through October 18.

World Bank Group President David Malpass welcomed the G20’s extension of debt relief program, calling for further efforts to help the poorest countries.

“Some core DSSI-related problems are still unresolved, notably lack of participation by private creditors and incomplete participation by some official bilateral creditors,” said the World Bank chief.