British Foreign Secretary, Ed Miliband says debt restructuring and other measures to support the world’s poorest countries should be a key priority when the UK chairs the Group of 20 (G20) international forum next year.
This was disclosed while he was speaking at an event hosted by the Rockefeller Foundation in Bangkok, where the International Monetary Fund(IMF) and World Bank are holding their annual meetings.
“We need a new deal on debt, a deal that supports countries to repay over longer time horizons and, crucially, refinancing with better rates to give developing countries precious fiscal space,” he said.
Miliband sought to rekindle the ambition that led to a major debt relief plan in 1999 under the then-finance minister Gordon Brown, while acknowledging the budget constraints that have led Britain to sharply scale back its aid spending.
IMF Chief, Kristalina Georgieva warned that adverse economic developments and the rapid advance of AI threatened to deepen the gulf between advanced and developing economies, especially given steep drops in overseas aid.
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A surge in borrowing costs in advanced economies including Britain, where government bond yields hit their highest since 1998 last week has also pushed up debt servicing costs in developing nations to a 25year high.
Miliband said “while many are not defaulting on their payments, they are being forced, if you like, to default on the prospects of future generations.”
He added that multilateral development banks already had scope to provide greater funding to poor, indebted nations, potentially to the tune of tens of billions of dollars, and further reform could allow hundreds of billions of dollars of refinancing.
Future borrowing terms should also ensure that individual private sector bondholders could not stall entire restructuring processes to extract bigger repayments, he said.
Reuters
