Sitharaman Calls for Deeper Dialogue on Debt Relief

Washington, Oct 24 (PTI) Finance Minister Nirmala Sitharaman on Thursday made a case for a deeper dialogue to help countries meet debt obligations without compromising critical investments.

Participating in the Global Sovereign Debt Roundtable on the sidelines of the World Bank and International Monetary Fund annual meetings here, Sitharaman cautioned against contingency financing instruments as they can result in deferred obligations, which can worsen future debt challenges.

The Global Sovereign Debt Roundtable (GSDR) brings together debtor countries and creditors. The objective is to build a greater common understanding among key stakeholders on debt sustainability and restructuring challenges, and ways to address them.

Important progress has been achieved since the GSDR last met at a principal level in April 2024.

Ongoing restructuring cases have reached important milestones under the Common Framework (CF) and outside.

As evidenced by the recent achievements of Ghana and Ethiopia, the common framework is delivering faster and more predictable debt treatments.

Agreements in Sri Lanka confirm restructuring processes outside the common framework are also working better as per the executive summary of the latest meeting.

Sitharman encouraged leveraging the GSDR's informal platform to better understand the perspectives of all parties, address concerns, and provide informed guidance to countries on the risks and benefits of these instruments, the Finance Ministry said in a post on X.

She reaffirmed India's commitment to GSDR's upcoming efforts.

During the day, Sitharaman chaired the Roundtable on Disaster Resilient Infrastructure on the sidelines of the World Bank and IMF annual meetings in 2024.

"Welcoming all the participants, FM Smt. @nsitharaman said Prime Minister Shri @narendramodi created the Coalition for Disaster Resilient Infrastructure #CDRI to transform our infrastructure systems for resilience against today's natural disasters and adapt to #ClimateChange," the Finance Ministry said in a separate post on X.

She stressed the danger of the development gains being undercut by increasing climate-induced risks to infrastructure and the critical services it supports.

Sitharaman said that over the years, India has ensured resilient economic growth by not only investing in hard infrastructure but also building institutional capacity by creating national and state-level disaster management agencies.

Citing an example, Sitharaman said India evacuated over 2.4 million people in a coordinated manner, minimising loss of life during Cyclone Amphan in 2020.

Reassuring India's commitment to sharing best practices during this resilience-building journey, she extended assistance to Global South towards shared challenges and said that under India's G20 presidency, a disaster risk reduction working group was created to increase commitment to disaster and climate-resilient infrastructure and prioritise stronger national financial frameworks for reduction in disasters.

She said India was looking forward to partnering with Africa and other developing countries to strengthen their resilience of infrastructure.