Yellen, in India for G20, urges faster fixes for debt crises

BENGALURU (AP): U.S. Treasury Secretary Janet Yellen is urging other leading economies to move faster in resolving debt crises that threaten a growing number of countries.

Yellen made the comments in a meeting Thursday with India’s finance minister, Nirmala Sitharaman, on the sidelines of a meeting of financial leaders of the Group of 20 major economies, the Treasury Department said in a statement.

Yellen thanked India for its help with efforts to restructure debts while encouraging the G-20 to step up such efforts.

India has been most active in helping its neighbor Sri Lanka to weather a crisis that has resulted in shortages of food, fuel and medicines, among many things. Yellen has urged China to work with other donor countries in addressing the problem.

In Bengaluru, G-20 finance ministers, central bank governors and other leaders are due to discuss a range of issues related to climate finance, seeking consensus on regulating digital currencies, global tax issues and other financial priorities.

Yellen and other officials earlier indicated they will also be discussing risks of heavy debt burdens for many countries after costly efforts to cushion the worst impacts of the COVID-19 pandemic. Those woes have deepened as countries’ import bills surged due to sustained higher prices for food, oil and fertilizers and weakening currencies.

Yellen visited Zambia in January, in part to discuss the African country’s $6 billion debt to China, its biggest creditor. Zambia became the site of Africa’s first coronavirus pandemic-era sovereign nation to default when it failed to make a $42.5 million bond payment in November 2020.

But a slew of other countries, from Laos and Afghanistan to Venezuela and Argentina, have seen their finances deteriorate in the past year.

China has expressed support for Sri Lanka but has not said if it will help reduce a multibillion-dollar debt that has left the Indian Ocean nation in financial and political turmoil.

One of Sri Lanka’s biggest creditors after extending it loans to build a port and other facilities, Beijing has offered a two-year suspension of repayments but balked at reducing the amount owed.

The International Monetary Fund has set a reduction in debt as a condition for an emergency loan.