WASHINGTON, Dec 15 (Reuters) – Chinese officials have
agreed to participate in a global sovereign debt “roundtable”
that would include a wide variety of stakeholders, including
private sector creditors, International Monetary Fund chief
Kristalina Georgieva said on Thursday.
Georgieva told an event hosted by the IMF that she was
feeling “a bit more optimistic” about the prospects for dealing
with major debt issues facing low- and middle-income countries
after high-level meetings with Chinese authorities last week.
The IMF chief last week she had a “fruitful exchange” with
her Chinese counterparts on the need to accelerate debt relief
for countries like Zambia and Sri Lanka, adding that she saw
“space for a platform for more systematic engagement on debt
issues, where China can play an active role.”
On Thursday, Georgieva said she had a “very constructive
engagement” with Chinese leaders on the debt issue during her
meetings after repeated calls for reforms to accelerate debt
treatments under the Group of 20 common framework and expand it
to include middle-income countries.
U.S. Treasury Secretary Janet Yellen and other Western
officials have expressed mounting frustration about what they
see as foot-dragging by China, now the world’s largest sovereign
creditor, in providing relief under the G20 framework.
China has argued that private creditors and multilateral
development banks should be required to accept debt “haircuts”
to make the process fair.
Kevin Gallagher, director of the Global Development Policy
Center at Boston University, said a broader, more systemic
solution was clearly needed.
“Systemic could be music to all of our ears, if it means
really bringing together all the different creditor classes,
including the multilateral development banks, but especially the
private bondholders and the Chinese,” he said.
He said it was also essential to move away from the
case-by-case approach of the G20 framework toward the more
systemic approach of earlier debt restructurings.
Georgieva said the discussions in China yielded some
progress.
“We agreed that we should form a global sovereign debt
roundtable at the highest level – the key creditors, some of the
borrowers, the private sector – with the World Bank, the IMF and
the G20 presidency being the co-conveners,” she said.
“We need that place … We cannot have solutions for
systemic risk with the parties to this solution being in
different rooms and not talking to each other at the same time.
That just cannot happen,” she said.
The proposed roundtable offered a structure to help improve
the debt treatment process and avoid a systemic debt crisis, she
said.
No further details were immediately available about the
roundtable and when it could have an initial meeting.
Georgieva, World Bank President David Malpass and other
financial leaders met in China’s Anhui province last week with
officials from the People’s Bank of China, China’s finance
ministry and its EXIM Bank and China Development Bank.
(Reporting by Andrea Shalal; Editing by Grant McCool and Andrea
Ricci)
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