Debt crisis matter of great concern for world: PM Modi ahead of G20 Summit

Debt crisis is a matter of great concern for the world, especially developing countries, Prime Minister Narendra Modi has said, as India looks at building consensus at the upcoming G20 summit to evolve a tangible framework to help the debt-ridden low income economies.

In an exclusive interview to PTI late last week, Modi said India's G20 presidency has placed a significant emphasis on addressing the global challenges posed by debt vulnerabilities, especially for nations in the Global South.

"The debt crisis is indeed a matter of great concern for the world, especially developing countries. Citizens from different countries are keenly following the decisions being taken by governments in this regard. There are some appreciable results too," Modi said.

"First, countries that are going through debt crisis or have gone through it, have begun to give greater importance to financial discipline," Modi said.

"Second, others who have seen some countries facing tough times due to the debt crisis are conscious of avoiding the same missteps," Modi said.

Under its G20 presidency, India has been consistently highlighting the need for a framework on debt restructuring to help countries facing mounting debt problems.

China, considered to be the world's largest sovereign creditor, has been showing reluctance to certain proposals on debt restructuring although an increasing number of G20 member countries are pitching for helping the low-income nations deal with the crisis.

According to estimates, over 70 low-income countries are reeling under a collective debt burden of $326 billion.

"The G20 finance ministers and Central Bank Governors have acknowledged the good progress in debt treatment of common framework countries and beyond the common framework too," Modi said.

"We have also been greatly sensitive to the needs of our valued neighbour, Sri Lanka, during their tough times," he said.

"To accelerate global debt restructuring efforts, the Global Sovereign Debt Roundtable, a joint initiative of the IMF, World Bank and the G20 Presidency was launched earlier this year. This will strengthen communication among key stakeholders and facilitate effective debt treatment," he added.

Modi hoped that rising awareness among the people of different countries on the problem will ensure that such situations don't recur often.

"While a lot is being done to address these issues, as I said earlier, I am positive that rising awareness among the people of different countries will ensure that such situations don’t recur often," he said.

In July, IMF Chief Kristalina Georgieva pitched for a speedier debt restructuring process for vulnerable countries.

India is hosting the G20 summit on September 9 and 10 in its capacity as the current chair of the grouping.

The G20 member countries represent around 85 percent of the global GDP, over 75 per cent of the global trade, and about two-thirds of the world population.

The grouping comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US and the European Union (EU).