© Reuters. FILE PHOTO: Euro, Hong Kong dollar, U.S. dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this picture illustration, January 21, 2016. REUTERS/Jason Lee/Illustration/File Photo
By Andrea Shalal
WASHINGTON (Reuters) – Officials from China, India, Saudi Arabia and Group of Seven wealthy nations will participate in a first virtual meeting of a new sovereign debt roundtable on Friday, three sources familiar with the plans said on Monday.
The roundtable will also include officials from countries that have requested debt treatments under the Group of 20 common framework – Ethiopia, Zambia and Ghana – as well as middle-income countries such as Singapore, Suriname and Ecuador, which have faced their own debt crises, the sources said.
The meeting will be co-chaired by the International Monetary Fund, the World Bank and India, the current leader of the Group of 20 finance officials, and comes a week before G20 finance officials are due to gather in Bengaluru, India, from Feb. 23-25, with an in-person meeting of the roundtable expected on Feb. 25.
Brazil, which will lead the G20 next year, is also taking part, one of the sources said.
The roundtable will include the Paris Club of official creditors and private sector participants – the Institute of International Finance (IIF) and two private-sector financial institutions that have asked not to be identified, the source added.
Creation of the body comes amid growing frustration about the slow pace of discussions on debt relief for Zambia, which first requested help two years ago. Organizers say the roundtable could help resolve issues in principle, including cutoff dates for debt treatments, and will not focus on Zambia or other individual cases.
G7, International Monetary Fund and World Bank officials have long pushed for faster and broader efforts to deliver debt relief to heavily indebted nations to avoid cuts in social services that they fear could tip off social unrest.
U.S. Treasury Secretary Janet Yellen and other G7 officials see China, now the world’s largest sovereign creditor, as the main stumbling block for quicker work on debt treatments. They are also pushing for agreement by G20 members on expanding the common framework to include middle-income countries.
Eric LeCompte, executive director of the Jubilee USA Network, a coalition of religious, development and advocacy groups, said support for the matter was growing among other countries. But China’s opposition – and that of Russia – remained significant a “stumbling block,” he said.
“The majority of countries support expanding these policies to middle-income countries, but China is the biggest challenge,” LeCompte said, adding that Europe had gone through a similar period of reluctance on debt relief in the 1990s, but eventually came around.
Also on the agenda will be China’s repeated calls for World Bank and other multilateral development banks to participate in debt reductions – a proposal firmly rejected by U.S. officials, who argue that those lenders already offer highly concessional loans and grants to countries in crisis.