FM discusses debt restructuring with World Bank, IMF heads

Union Finance Minister Nirmala Sitharaman on Saturday held a roundtable with the heads of the World Bank and the IMF and discussed the issue of debt restructuring faced by some of the countries.

The roundtable with World Bank President David Malpass and IMF managing director Kristalina Georgieva held on the sidelines of the first G20 Finance Ministers and Central Bank Governors meeting discussed the issue of debt restructuring challenges and debt vulnerabilities.

"Finance Minister Smt. @nsitharaman flagged the need to acknowledge today's diverse creditor landscape and build a common understanding of challenges and ways to address them," a tweet from the Finance Ministry said.

She called for the voices of the vulnerable and under-represented debtor countries to be heard through the G20.

"Ms@KGeorgieva, MD, IMF@IMFNews and Mr@DavidMalpassWBG, President @WorldBank called for faster debt restructuring processes and noted the debt forum was an opportunity to work together and help vulnerable countries," another tweet said.

Following the outbreak of COVID-19, many countries were pushed into debt distress. There have been small steps on debt restructuring side.

Creditor committees have been established for some of the worst-off debtors—Zambia, Chad, and Ethiopia—with varied results. Committees for Ghana and Sri Lanka are likely to follow suit.

The scale and depth of debt issues faced in particular by many African countries require a multilateral approach from all classes of creditors, experts said.