Progress on debt restructuring measured, says World Bank president

2023 Spring meeting of the World Bank Group and the International Monetary Fund in Washington

WASHINGTON Reuters - The President of the World Bank said progress on sovereign debt issues would be measured by actual restructuring deals being agreed for Ghana, Ethiopia and Zambia, and said there was still no agreement on his longstanding call for a standstill in debt service payments for countries seeking help.

Malpass, speaking a day after the first meeting of a new sovereign debt roundtable, said several other issues still needed to be resolved, including China's previous insistence that multilateral development banks also accept losses as part of debt restructuring deals.

We're pushing along on debt, he said. Real countries that achieve a restructuring will measure progress in debt restructurings. It's a case-by-case mechanism. He added: The target now was to ensure that Ghana, Ethiopia and Zambia, three countries seeking debt relief under the Group of 20Group of 20 common framework, moved forward in their separate debt processes.

Debtor nations, international financial institutions and private creditors met Wednesday at the roundtable meeting to take steps to jumpstart and streamline long-standing debt restructuring efforts, including through improved data sharing.

A joint statement by the World Bank, International Monetary Fund and India, the current president of the Group of 20Group of 20 G 20 major economies, did not mention any specific commitments by China, the world's largest bilateral creditor, to speed the restructuring process.

Reuters reported that Beijing was expected to drop its demand that multilateral development banks share in debt restructuring losses, partly in exchange for the IMF and World Bank providing earlier access to their debt sustainability analyses for countries receiving debt treatments.

The statement also included the institutions' part of that bargain, to share more information more quickly, and for multilateral development banks MDBs to quantify net positive flows of concessional financing in restructuring cases.

China and other participants had acknowledged that there are different ways of contributing to a restructuring, and the best way for MDBs to contribute is to provide fresh financing to countries, as much as possible in grant terms, said IMF strategy chief Ceyla Pazarbasioglu. Malpass said there were still disagreements within China over the issue, with President Xi Jinping and others downplaying the earlier demand and others - who represent individual creditors - still seeing it as an obstacle.

More work is to be done on the issue of comparable treatment of various creditors at a workshop to be held in May, he said. No particular date has been set for the meeting, he said.

China has also raised concerns about how to deal with domestic debt restructuring and how to treat project loans and projects with dedicated revenue, he said.

The private sector creditors who also participated in Wednesday's meeting had indicated that they would want to participate in debt restructuring deals as part of their fiduciary responsibility, Malpass said.