Debt-ridden poor nations need global support: FM

Mumbai Union Finance Minister Nirmala Sitharaman on Friday pitched for greater coordination among the international community to address the challenges faced by debt-saddled low and mid-income countries.

Addressing a seminar on the global economy organised as part of the finance track of India's G-20 presidency, Sitharaman said such a move can help shield vulnerable populations from economic hardships. "The international community must collaborate and find stronger ways to coordinate debt restructuring, for low-income and vulnerable middle-income countries facing debt distress," the finance minister said in a video address. She said as part of the Indian presidency of the top economies' grouping, the country has placed great importance on the management of global debt vulnerabilities because aof its commitment to be the voice of the global south.

The finance minister said the G-20 finance track has discussed the issue of debt challenges in vulnerable economies which present "significant economic risks" to their sustainable development. “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 hardships," Sitharaman stressed. In the comments that come around a month ahead of the meeting of G-20 heads of state in New Delhi, Sitharaman said so far, India has ensured that “geopolitical differences do not supercede” the core G-20 mandate of international cooperation. "The Indian presidency has ensured that the common ground is reached on all economic issues while maintaining a forward-looking agenda for G-20 in 2023," she said.

The FM also said that at a time when multilateralism is facing challenges, the multilateral development banks are facing increasing demands from both the donor and borrowing countries to expand their lending operations beyond their core development mandate and added that these institutions are not equipped to address the same. Sitharaman said an upcoming synthesis paper developed by the International Monetary Fund and the Financial Stability Board will be instrumental in shaping future regulatory measures for crypto assets. The Indian G-20 presidency has also emphasized innovative financial models to mobilize private sector investments and address the infra-financing gap crucial for building future cities, she said.