Finance Minister Nirmala Sitharaman Friday said the global community must find ways to coordinate on restructuring the debt of vulnerable low-and-middle income countries.
Speaking at the G20 Finance Track seminar on ‘Global Economy: Challenges, Opportunities and the Way Forward’, she said the escalation of debt issues in vulnerable economies poses significant economic risk to their sustainable development.
“The international community must collaborate and find stronger ways to coordinate debt restructuring for low-income and vulnerable middle-income countries facing debt distress,” Sitharaman said while addressing the seminar virtually.
The seminar was jointly organised by the Finance Ministry and the Reserve Bank of India (RBI). India will hold the G20 Presidency till November 30, 2023.
Sitharaman said the Indian G20 Presidency has placed great importance on the management of the global debt vulnerabilities.
By restructuring existing debt and enhancing access to affordable finance, the international community can contribute to releasing financial resources in debtor countries to shield vulnerable populations from economic hardship.
Despite notable advancements, disparities in access, usage and quality of financial services persist among vulnerable populations and micro, small and medium enterprises, Sitharaman said. “In this era of technological transformation, unlocking the full potential of digital progress for all is essential for a fair and inclusive future,” she said.
Addressing the seminar, Chief Economic Advisor V Anantha Nageswaran said the world is witnessing increasing debt vulnerabilities. While debt is a key instrument to help address development needs, over the past decade it has become increasingly unsustainable with several countries facing severe distress, he said.