ECONOMYNEXT – The Director of the Group of 24 (G24), Iyabo Masha, has called for the establishment of a comprehensive debt resolution framework for middle-income countries, emphasising its relevance for nations like Sri Lanka, which continues to grapple with debt sustainability challenges.
“I would say that Sri Lanka has come a long way from where it was 2 years ago. The last IMF Article IV Consultation assessment does show that growth is picking up, that fiscal buffers are coming up, and also import duties are rising, so that indicates that the countries are making some recovery,” Masha stated, highlighting the gradual economic progress Sri Lanka has achieved.
She further stressed that while Sri Lanka’s economic recovery is underway, addressing its substantial debt burden remains a priority.
Currently, debt relief frameworks like the Common Framework, initiated by the G20 and Paris Club, are only available to low-income countries, leaving middle-income nations like Sri Lanka without a structured mechanism to engage with creditors.
“As for the position that the G‑24 takes on this issue, the way it affects Sri Lanka most is on the debt sustainability issue. So what we are calling for is that countries, specially middle‑income countries, should also have a framework, a forum where they can negotiate with their debtors,” she said, underscoring the need for such countries to have a platform akin to the Sovereign Debt Resolution Roundtable.
Masha emphasised that the proposed roundtable is not an organisation that directly provides debt relief, but rather a forum that promotes common understanding and timely, comprehensive debt reduction for both middle- and low-income countries.
“If things work out and the discussion in that area picks up quite fastly, then we can see the likes of Sri Lanka and maybe Lebanon and a few other countries benefiting from that,” she added.
Masha, appointed in February 2023, is the first African to serve as the Director of G24,
Established in 1971, G24 is an intergovernmental organisation that coordinates the positions of developing countries on global financial and monetary issues. It ensures that emerging markets and developing economies are represented in discussions within key institutions like the IMF and the World Bank. (Colombo/Oct23/2024)