G20 summit warns of ‘worsening debt crisis’ around the world

The G20 leaders intend to express their concerns at the “worsening debt crisis” facing some middle-income countries and call on all creditors, whether public or private, to respond quickly to requests for debt consolidation.

The draft G-20 leaders’ statement includes strong language on debt issues, as leaders recognize that the problems are not limited to the poorest countries.

The draft emphasized the importance of the participation of all public and private sector creditors in debt relief and an equitable share of the burden.

But the statement did not mention China, which has been criticized by Western countries and international financial institutions for its delay in debt restructuring efforts.

The leaders said, according to the draft, they would intensify their efforts to implement the common debt treatment framework “in a predictable, coordinated, orderly and timely manner”.

The G20 and the Paris Club of official creditors had developed the common framework at the end of 2020 to help low-income countries overcome the “COVID-19” crisis.

However, it has proven difficult to achieve results, and only 3 countries have submitted formal requests to address debts under the framework, namely Chad, Zambia and Ethiopia.