Janet Yellen calls for faster debt relief for poor countries

Treasury Secretary Janet L. On Sunday, international creditors relented to speed up their efforts to offer debt relief to developing countries facing default, arguing that supporting their flagging finances would benefit the global economy.

Speaking in Gandhinagar, India, ahead of a meeting of finance ministers from the Group of 20 nations, Yellen cited the recent agreement between international creditors, including China, to help Zambia pay off its debt. She said the agreement, which took more than a year to negotiate, should be a blueprint for use in helping other countries, such as Ghana and Sri Lanka, accelerate debt relief and restore growth.

“We should apply the common principles that we agreed on in the Zambia case to other cases rather than starting from scratch each time,” Ms. Yellen said. “And we must go faster.”

The Treasury secretary noted that more than half of low-income countries are in or close to debt distress — double the total compared to 2015. These countries face a vicious cycle, as heavy levels of public debt make it difficult to attract public and private investment.

“When these countries develop and contribute to the global economy, we all benefit,” said Ms. Yellen.

In the past month, Govt Zambia He hailed a deal that secures a three-year deferral of payments on $6.3 billion in debt, mostly to Chinese lenders. This paved the way for The International Monetary Fund releases $188 million in relief money as part of a $1.3 billion rescue package. The arrangement came after a year and a half of painstaking negotiations that left Zambia’s finances in a precarious state.

Ms. Yellen said she would urge her G20 counterparts to accelerate efforts to allow poor countries to restructure their debt and provide more clarity to borrowers on how restructuring works.

Her trip to India comes less than a week after she returned from Beijing, where she held meetings with senior Chinese officials on how to stabilize the US-China relationship.

Besides the debt crisis, the finance ministers are expected to discuss international efforts to modernize the World Bank and other regional development banks.

The finance ministers are expected to continue discussing international support for Ukraine, which has been a divisive issue within the G20. Russia is a member of the group, and many countries, including India, have tried to remain neutral in the conflict.

In her remarks on Sunday, Ms. Yellen made clear that the United States and its Western allies have no intention of cutting back on support for Ukraine.

“Our coalition’s support for Ukraine is unequivocal,” said Ms. Yellen. The United States will stand by Ukraine as long as it is needed. And I know allies and partners in our coalition will, too.”