G7 leaders welcome launch of creditors meeting for Sri Lanka

G7 Hiroshima Summit 2023 

•  Say it could be replicated to address debt sustainability issues in other low and middle-income countries 

 Leaders of the Group of Seven (G7) welcomed the launch of creditors’ meeting for Sri Lanka under the three co-chairs France, India, and Japan and said it could be a model that could be used as a template to address the debt issues faced by middle income countries.
The G7 leaders met in Hiroshima for the annual Summit from May 19-21. During the summit they expressed concerns over serious challenges to debt sustainability specially among low- and middle-income countries undermining the progress towards the sustainable development goals (SDGs).

They also expressed their worries on how low-and middle-income countries being disproportionately affected by Russia’s invasion of Ukraine and wider global challenges.
Japan, India and France launched the creditors’ meeting on April 13 on the sidelines of the IMF Spring Meetings. The three creditor countries have been closely working towards a coordinated debt restructuring for Sri Lanka.

“We reiterate the urgency of addressing debt vulnerabilities in these countries and fully support G20’s effort to improve the implementation of the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI) in a predictable, timely, orderly and coordinated manner, providing clarity to participants,” the G7 leaders said in an official statement.
“Beyond the Common Framework, debt vulnerabilities in middle income countries (MICs) should be addressed by multilateral coordination,” 

“In this respect, we welcome the launch of the creditors’ meeting for Sri Lanka under the three co-chairs, France, India, and Japan, and look forward to a swift resolution as a successful model for future multilateral efforts to address MICs’ debt issues.
We also stress the importance of private creditors providing debt treatments on terms at least as favourable to ensure fair burden sharing in line with the comparability of treatment principle.”

We welcome the development of Climate Resilient Debt Clauses (CRDC) to enhance the safety net for borrowers facing the impacts of climate change. We welcome work by our finance ministers on this topic and encourage more creditors to offer CRDC for loan agreements.
In order to enhance debt data accuracy and transparency, we invite all official bilateral creditors to join the data sharing exercise for debt data reconciliation, including through further advancing the G20’s initiative in the area of debt data accuracy,” it added.