The World Bank and International Monetary Fund (IMF) will propose concrete measures to address the mounting debt problems of poor countries during this week's Spring Meetings. At the Global Sovereign Debt Roundtable, a meeting led by the Bretton Woods institutions and Group of 20 chair India in Washington, D.C., the World Bank and IMF will introduce several proposals to tackle some of the biggest obstacles to debt restructuring, according to a blog post by President David Malpass.
One proposal is to share joint World Bank-IMF debt sustainability analysis with all creditors involved in discussions simultaneously, which will help calculate the size of debt relief needed. Other proposals include accelerating and strengthening restructuring by creating clear timelines, suspending debt service payments at the start of the process to incentivize a deal and protect repayment ability, and improving transparency and information sharing.
Over half of the world's low-income countries are at high risk of debt distress or are already in it, and several have defaulted. Despite the G-20's agreement in 2020 to a plan called the Common Framework to smooth the process of restructuring loans, disagreements between traditional sovereign debt restructuring countries and China, which is now a major international creditor, have caused delays.