PM's 'trap' dig at China, says debt restructuring boost in India G20 presidency
Prime Minister Narendra Modi shed light on significant financial matters on India's G20 agenda, including debt restructuring for countries grappling with high levels of sovereign debt, in an exclusive interview with Business Today.
When asked about progress and the possibility of consensus on these issues during India's presidency, PM Modi emphasised the importance of financial discipline and the need for countries to safeguard themselves from financial indiscipline.
PM hints at China’s exploitation of debt-ridden nations
PM Modi also acknowledged that certain forces have taken advantage of debt crises in other nations, exploiting their vulnerabilities and pushing them into debt traps, hinting at China.
His comments were directed at China, which has pushed nearly a dozen economic countries into a debt trap by giving loans worth billions of dollars. Some of the countries that are facing a financial crisis as a result are Kenya, Zambia, Laos, Mongolia, and even Pakistan.
“Financial discipline is very important for all countries. It is the duty of each country to guard itself from financial indiscipline but at the same time, there are forces that have sought to take undue advantage by catalysing debt crises. These forces have capitalised on the helplessness of other countries and led them into debt traps,” PM Modi said.
PM Modi said the G20 has been committed to addressing debt vulnerabilities in low- and middle-income countries since 2021, recognising that their progress is essential for achieving the 2030 Sustainable Development Goals (SDGs).
However, he added that debt servicing has impeded these countries' efforts, limiting their fiscal space for SDG investments.
On achievements under India’s G20 presidency
PM Modi said under India's presidency in 2023, the G20 significant progress has been made in debt restructuring through the Common Framework.
“In 2023, under India’s presidency, the G20 gave a significant boost to debt restructuring through the Common Framework. Before India’s lead, only Chad underwent debt restructuring under this framework. With India’s focus, Zambia, Ethiopia, and Ghana have made notable advancements. India played a pivotal role, being a key creditor,” the prime minister said.
Beyond the Common Framework, G20 forums facilitated coordination for debt restructuring in Sri Lanka. A committee co-chaired by India, Japan, and France played a crucial role in this process, added PM Modi.
Furthermore, he underscored the inception of the Global Sovereign Debt Roundtable during India's presidency.
“The Indian presidency also saw the inception of the Global Sovereign Debt Roundtable, co-chaired by the IMF, World Bank, and G20 presidency. The Roundtable aims to strengthen communication and foster a common understanding among key stakeholders, both within and outside the Common Framework, for facilitating effective debt treatments,” he added.
In an exclusive interview with Business Today magazine, PM Narendra Modi talked about India's G20 agenda and about countries grappling with high levels of sovereign debt.
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