Key Points
At present, the Framework is not open to all developing countries needing debt relief...
As it approaches the half-way mark of its Group of 20 (G20) presidency, India is making little progress on the major challenges facing the G20 and the world economy...
Perhaps most concerning is that developing country debt distress has continued to increase to alarming levels and the cost of capital is at new highs just at the time when developing countries need to mobilise trillions of dollars annually to meet the UN 2030 Sustainable Development Goals (SDGs) and Paris Climate pledges..
Indeed, the United Nations Development Programme says that the number of developing countries spending more than 20% of government revenue on external debt service now equals the number that were in that situation in the 1990s when the ambitious Highly Indebted Poor Countries (HIPC) Initiative was put in place...
As G20 the president, India should support reforms that let all countries in debt distress into the Framework and should support the use of carrots (Brady-bond-like guarantees on newly restructured debt) and sticks (lending into arrears, standstills on debt payments, etc.) in bringing reluctant bondholders and Chinese commercial entities to the negotiation table..
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