Mr. David Malpass, President of the World Bank Association, stated that the organization is currently collaborating with the International Monetary Fund on the common framework that the G20 developed for dealing with debt overhang and debt burdens.
He said this when referring to questions at the 2021 spring meeting press conference on Wednesday.
“We are actively working with the IMF on the common mechanism that the G20 developed for coping with debt overhang and debt burdens,” Malpass said.
“It is based on the poorest nations, the IDA countries, and we are looking forward to making progress in that regard.” In its consultations this week, the G20 has, I believe, called for the creation of the first creditor committee under the common framework.”
He noted that many middle-income countries had difficulty accessing market-based financing, as well as rising fiscal deficits that were troublesome.
While emphasizing the importance of transparency, he stated that the group should seek a more equitable arrangement between creditors and debtors.
“The creditor – right now, the system is favorable to borrowers in terms of using court compliance of liens, for example, to impose contracts, even with sovereign governments,” he added.
He said that one of the big challenges confronting middle-income countries was the difficulty in restructuring collateralized debt.
