IMF Asks G20 Leaders To Strengthen Financial Architecture

Financial illustration (Photo: Antara)

JAKARTA - The International Monetary Fund (IMF) invites all G20 leaders to strengthen international financial architecture.

IMF IMF Managing Director Kristalina happened to strengthen the international financial architecture specifically in the field of debt resolution and strengthen global financial safety nets.

"The international community has a responsibility to jointly find solutions for our most vulnerable global family members," Kristalina said, as quoted by Antara, Monday, February 27.

With global growth slowing down in 2023 and staying below historical averages, he mentioned too many people in many countries are struggling to meet their needs.

In debt resolution, Crystal is very supportive of efforts to strengthen debt architecture and increase debt settlement speed and effectiveness. The move is given the increasing debt vulnerability in many countries.

The country's debt vulnerability, which had increased before the pandemic, has been exacerbated by shocks stemming from COVID-19 and Russia's war against Ukraine. This in particular applies to developing and low-income countries with very limited policy space and enormous development needs.

Therefore, he stressed that it is very important for the G20 to strengthen its debt architecture. The G20 took that step in 2020 with the Debt Service Suspension Initiative (DSSI) and formed a Common Framework (CF) for debt settlement.

"Since then, CF has provided debt operations for Chad. Now it is very important to complete the restructuring of Zambia's debt, form a Creditor Committee for Ghana, and advance cooperation with Ethiopia," he said.

However, continued Crystal, more predictable, timely, and regular processes are needed both for countries under CF and for countries that are not covered by them, including Sri Lanka and Suriname.

Meanwhile, in strengthening the global financial safety net, the IMF itself has increased loans as IMF members face significant economic challenges, which it has brought in recent years.

Through standard lending and emergency financing facilities, the IMF has approved financing of US$272 billion for 94 countries since the start of the pandemic, of which as many as 57 countries are low-income countries.