The director of the IMF wants debt restructuring

At a press conference in Marrakech during the Annual Meeting of the International Monetary Fund (IMF) and the World Bank, Kristalina Georgieva, managing director of the IMF, has renewed her call to accelerate debt restructuring processes in distressed countries that request.

Georgieva has highlighted the importance of creativity in the so-called “Common Framework”, an initiative supported by the G20 countries. Although this approach has not produced quick results in the past, the economist reports that there has recently been encouraging progress in processing requests for assistance.

The managing director mentioned concrete examples, such as Chad, who completed his restructuring in 11 months; Zambia, in 9 months; Sri Lanka, in 6 months; and the current ongoing negotiations for Ethiopia, which Georgieva hopes will continue to move forward similarly.

The “Common Framework” not only involves the traditional creditors of the Paris Club, but also features new creditors such as Saudi Arabia, China, Brazil and the Arab Emirates, as well as private creditors and representatives of borrowing countries, all working together.

Georgieva showed understanding towards countries’ complaints about their debt burden, especially when it relates to the effects of climate change, a problem for which these countries are not responsible.

Regarding the cancellation of debt in countries in difficulty, Georgieva acknowledged that this measure is extremely difficult, since it requires the unanimous agreement of all participants in the “Common Framework” round table.

K. Tovar

Source: Bancaynegocios

(Reference image source: Unsplash+)

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