To measure progress on sovereign debt, look to actual deals -World Bank’s Malpass

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World Bank President David Malpass said on Thursday that progress on sovereign debt issues will be measured by the actual restructuring deals being agreed for Ghana, Ethiopia and Zambia, and said there was still no agreement on his long-running call for a debt-service freeze. countries requesting assistance.

Speaking a day after the first meeting of the new sovereign debt roundtable, Malpass told Reuters that several other issues still needed to be resolved, including China’s previous insistence that multilateral development banks also accept losses as part of debt restructuring deals.

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He said, “We’re going over the debt.” Debt restructuring progress will be measured by the actual countries that restructure. It’s a case-by-case mechanism.”

He said the aim now is to ensure that Ghana, Ethiopia and Zambia, the three countries seeking debt relief under the G20 Common Framework, move forward with their separate debt operations.

Global creditors, debtor states, international financial institutions and private creditors agreed at a roundtable meeting on Wednesday to take steps to jumpstart and streamline long-stalled debt restructuring efforts, including through better data sharing.

A joint statement by the World Bank, the International Monetary Fund and India, the current chair of the Group of 20 major economies, did not mention any specific commitments by China, the world’s largest bilateral creditor, to speed up the restructuring process.

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Reuters reports that Beijing is preparing to drop its demand that multilateral development banks share losses in debt restructuring, in part in return for the International Monetary Fund and World Bank providing early access to debt sustainability analyzes to countries receiving debt remediation.

But the statement included only the institutions part of that deal, to exchange more information more quickly and multilateral development banks (MDBs) to identify “net positive flows” of concessional financing in cases of restructuring.

The IMF’s chief strategy officer, Sela Pazarbasioglu, said China and other participants recognized that there are different ways to contribute to restructuring, and that “the best way for multilateral development banks to contribute…is to provide new financing to countries, as much as possible in grant terms.”

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There are still disagreements within China on the issue, Malpass said, with President Xi Jinping and others downplaying the earlier application and others — representing individual creditors — still viewing it as an obstacle.

He said further work will be done on the issue of identical treatment of different creditors at a workshop to be held in May. He said that no specific date has been set for the meeting.

He said China has raised concerns about how to handle domestic debt restructuring and how to handle project loans and projects with earmarked revenue.

Private creditors who also participated in Wednesday’s meeting indicated that they would like to participate in debt restructuring deals as part of their fiduciary responsibility, Malpass said, describing it as a positive development. (Reporting by Andrea Shalal; Editing by Andrea Ricci)