MDBs must support countries like Sri Lanka - G24

MDBs must support countries like Sri Lanka - G24 1st Vice Chair

by Zulfick Farzan 10-10-2023 | 10:36 PM

COLOMBO (News 1st); The 1st Vice-Chair of G24,  Benjamin E. Diokno, who is also the Secretary / Minister of Finance of the Philippines pointed out that if a country's debt servicing exceeds the budget for health and education, it should considered as top priority for any assistance from Multilateral Development Banks (MDBs).

Speaking following the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) he said that MDBs should consider support for countries that are in a really bad position.

Iyabo Masha, Director of G24 Secretariat speaking at the same press conference on Tuesday (10) on Marrakech, Morocco at the 2023 Annual Meetings of the International Monetary Fund and the World Bank responding to question by News 1st on the situation in Sri Lanka said that Roundtable on international taxation: Global Tax Policy Reforms and the Options for G-24 Members will take place later this week, and some progress could be achived by Sri Lanka in its debt reworking.

At the same time, the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) has called for an urgent need for reforms in the multilateral system to address global issues.

The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) has issued the following statement:

Development and Climate Financing: G-24 members noted that the global economic landscape is uncertain, with any countries affected by declining access to and tight external finance conditions, high debt levels and rising inflation. The Group called for a variety of steps to increase the financing available to developing countries. They asked for allocation of new Special Drawing Rights, the IMF’s reserve currency; reform of IMF short-term financing instruments; increased concessional resources to low-income countries; reform of the IMF’s surcharge policy; increased channeling of SDR from donor countries to needy countries and increase of the Fund’s resource base through its 16th General Review of Quotas. Member countries were of the view that these recommendations would provide additional financing for members to mitigate shocks and invest in climate action and sustainable development.

Debt relief: G-24 members expressed concern about high and increasing public debt levels, with many developing countries carrying unsustainable debt burden. While members welcome the G-20 Common Framework, they noted that some of the poorest and most vulnerable countries are excluded from the benefits of debt relief. The G-24 called for a durable debt resolution for these countries. Reforms of the Bretton Woods Institutions: G-24 members expressed their concern with the progress on IMF general quota review. They reiterated their call for the IMF to remain a quota-based institution in order to bolster the voice and represention of emerging market and developing economies, who now account for a larger share of world GDP. Additionally, they recommended further pursuit of governance reforms aimed at correcting regional underrepresentation in the IMF. While welcoming the World Bank reform program to expand its mandate, better utilize resources, and improve operating efficiencies, G-24 members called for more concessional lending, especially for investments in global public goods and sustainable development such as affordable water and energy.

Reforms of International Taxation and Trade: Members welcome the United Nations Secretary-General's Inclusive and Effective Tax Reform agenda and called for a multilateral consensus to drive enduring progress on the initiative as it would foster a more just and balanced international tax system. On trade, members noted the rising trend in protectionist policies, especially from the largest economies, has adverse repercussions on global integration and trade. They noted that developing countries experience unequal distribution of the benefits of trade, limited market access and unfair trade practices, especially in the agriculture sector, which is often the main source of livelihood for the poor. They therefore called on the Breton Woods Institutions (BWI) to lend their support to reforms of the multilateral trade system.