Treasury Secretary Janet L. Yellen called on Sunday for international creditors to speed up their efforts to provide debt relief to developing countries facing default, arguing that raising their ailing finances would benefit the global economy. economy.
Speaking in Gandhinagar, India, before a gathering of finance ministers from the Group of 20 countries, Ms. Yellen brokered a recent agreement with international creditors, including China, to help Zambia repay its debts. He said the agreement, which took more than a year to negotiate, should be a blueprint to be used to help other countries, such as Ghana and Sri Lanka, to speed up debt relief and restore growth.
“We should apply the common principles we agreed upon in the case of Zambia to other cases instead of starting from zero every time,” said Ms. Yellen. “And we have to go faster.”
The Treasury secretary noted that more than half of low-income countries are at or near debt distress — double the total from 2015. These countries face a vicious cycle, as heavy levels of public debt are making it difficult to attract public and private investment.
“When these countries develop and contribute to the global economy, we all benefit,” said Ms. Yellen.
Last month, the government of Zambia hailed a deal that ensured a three-year moratorium on payments for $6.3 billion in debt, the bulk of it to Chinese lenders. It clears the way for IMF to release $188 million in aid funds under the $1.3 billion rescue package. The arrangement comes only after a year and a half of torturous negotiations that have left Zambia’s finances in a precarious state.
said Ms. Yellen said she will urge her G20 counterparts to speed up efforts to allow poor countries to restructure their debt and provide more clarity for borrowers about how the restructuring should work.
His trip to India comes less than a week after he returned from Beijing, where he held meetings with top Chinese officials about how to strengthen relations between the United States and China.
Beyond debt distress, finance ministers are expected to discuss international efforts to modernize the World Bank and other regional development banks.
Finance ministers are expected to continue discussing international support for Ukraine, which has become a contentious issue within the G20. Russia is a member of the group, and several countries, including India, have tried to remain neutral in the conflict.
In her remarks on Sunday, Ms. Yellen said that the United States and its Western allies have no intention of reducing support for Ukraine.
“Our coalition’s support for Ukraine is clear,” said Ms. Yellen. “The United States will stand with Ukraine as long as necessary. And I know our allies and coalition partners will do the same.”