Rising debt is shared concern of both creditors, debtors, Sri Lanka says
ECONOMYNEXT – Rising debt levels are a shared concern and responsibility of both debtors and creditors, Sri Lankan Finance Minister Mangala Samaraweera, who is also chairman of the G-24 group, has said.
Major powers should strengthen the rules-based global trading system, he said in Bali, Indonesia where Ministerial Meeting of the Group of Twenty-Four (G-24) developing countries and the annual meetings of the International Monetary Fund and World Bank Group are being held.
G-24 and IMF and World Bank delegates discussed debt vulnerabilities that are rising in some developing countries, particularly low-income countries, a statement said.
According to the IMF, debt as a percentage of GDP has risen from 33 percent to 47 percent in the last 5 years for low-income countries.
“Such a rapid rise in debt and rates should be a concern to both creditors and debtors, which share a responsibility to foster debt transparency and sustainability,” Samaraweera said.
“Global growth continues broadly but risks are rising for developing economies with higher oil prices, rising interest rates, high debt levels and the threat of trade war as top concerns,” said Samaraweera.
“We urge major powers to reform and reinforce rather than discard the rules-based global trading system.”
The statement said the G-24 called for action from the IMF, World Bank and multilateral partners and donors on capacity building for fiscal and debt management and sustainability and debt transparency.
“We need to recognize the issue and try to improve the transparency around borrowing and recognize that both borrowers and lenders bear responsibility for ensuring sustainability.
“On sovereign debt resolution, we have recognized that, with greater reliance on market-based finance, the challenges of maintaining debt sustainability and resolving sovereign debt crises evolve, and that we need a better framework to deal with such challenges.”
(COLOMBO, 11 Octber, 2018)