G20 Nations Reject A One-Size-Fits-All Approach To Debt Treatment: Official

G20 countries agree that a one-size fits all solution for debt treatment of debt-distressed nations would not be feasible as it does not include the specific needs of the country, an official said.

Speaking on the condition on anonymity, the official added the response from China has not been encouraging so far in developing a common understanding on debt restructuring.

This comes amid China being one of the largest bilateral creditors.

The nations have agreed that the debt restructuring for low-income countries and middle-income countries should be looked at in separate ways, inclusive on their specific needs, the offical added.

Speaking ahead of the 1st FMCBG in Bengaluru in February, and again on Sunday, US Treasury Secretary Janet Yellen noted that she will push for all bilateral official creditors, including China, to participate in meaningful debt treatments for developing countries and emerging markets in distress.

The official further added that the G20 countries have broadly expressed satisfaction on all issues raised by India and that the debt crises in various nations were also aggravated by the pandemic.

A similar view also emerged in the chair's summary that was released in the Bangalore meet in February where they recognised the urgency to address debt vulnerabilities in low and middle-income countries.

While the debt treatment for Chad, and Zambia which has been recently finalised, the resolution for the debt situation for Ghana and Sri Lanka still remains on the G20 agenda.

On June 22, 2023, the Zambian authorities reached an agreement with the Official Creditor Committee (OCC) on a debt treatment that is in line with Fund program parameters.  According to a Reuters report, Zambia has struck a deal to restructure $6.3 billion in debt owed to governments abroad including China.