Wealthy nations must improve their floundering flagship debt relief initiative or face a spate of debt crises in the developing world, experts and campaigners say as a meeting of finance chiefs of G20 major economies opened this week.
Their uncertain fate, coupled with the fear of being punished by the market, have led other governments to steer clear of the Common Framework. With the US Federal Reserve on the verge of hiking interest rates, borrowing costs are set to increase for riskier emerging markets. Hung Tran, a former IMF deputy director now with the Atlantic Council think tank, wrote this week that G20 initiatives to deal with debt had “largely failed”.
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