The International Monetary Fund Managing Director, Mrs. Kristalina Georgieva has appealed to countries in a relatively stronger positions to help vulnerable nations especially those under debt distress.
The IMF chief in her speech during the Boao Forum for Asia, said such assistance would be particularly important against the backdrop of high interest rates and currency depreciation.
“We urgently need faster and more efficient global mechanisms for providing debt treatments to these countries. Success would remove one important source of uncertainty to the global picture.”
Mrs. Kristalina Georgieva
Georgieva further noted that the IMF welcomes China’s engagement in the Common Framework programme and participation in the new Global Sovereign Debt Roundtable.
According to Mrs. Georgieva, countries need to work together to reinvigorate international trade in an equitable way for more people to benefit from globalization and diversify supply chains based on economic logic.
The IMF research, she said, showed the long-term cost of trade fragmentation could be as high as 7% of global gross domestic product, and Asia as a highly integrated region, would be the most adversely affected by runaway fragmentation.
“Governments need to protect vulnerable people in their own countries who have been especially hit hard in the past three years by the COVID-19 pandemic.
“This means there is a need for fiscal policies that will provide targeted support to those in need or those most affected by food insecurity or the cost-of-living crisis.”
Mrs. Kristalina Georgieva
The Boao Forum, often seen as Asia’s equivalent to the World Economic Forum’s annual meeting in Davos, Switzerland, is being held in the southern Chinese Resort Island of Hainan until Friday, 31st of March, 2023.
Not limited to that, Mrs. Georgieva reiterated her plead to creditor-nations group – Paris Club (G20) to quicken the process to restructure Ghana’s debt.
According to the IMF Chief, failure of the G20 countries to speed up the formation of a Creditor Committee for Ghana will further undermine the country’s stability.
A creditor committee, she said, will enable Ghana to formally seek financial assurances from bilateral creditors and gauge their willingness to engage in debt restructuring negotiations.
China Pledged Support For Ghana
However , as the IMF Chief pleads support for weaker countries, it can recalled that the Chinese authorities have expressed their willingness to offer assistance to Ghana’s current short-term liquidity challenges. This has put Ghana in a position of being recognized as a ‘lucky country.’
The Asian country, China, assured Ghana of its effort to support the nation in achieving her developmental aspirations, and to help the country revive its economy.
“China believes in promoting debt sustainability and sustainable development. We know that these are short-term challenges which we as responsible creditors remain committed to resolving.
“The long-standing and prosperous relationship between Ghana and China imposes on us, a responsibility to help. Chinese authorities have confidence in Ghana’s economic management and its long-term economic viability.”
China’s Finance Minister, Liu Kun
Thus, Mr. Kun said he wanted to ensure that Ghana’s external debt treatment request was considered expeditiously.
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