Commonwealth discusses joint action on debt crisis
What you need to know:
Commonwealth finance ministers will explore policy options and strategies to prevent recurrence of debt crises.
Dar es Salaam. Commonwealth finance ministers will meet in Washington next Thursday to discuss interventions to prevent future debt crises, the statement issued by the Commonwealth Secretariat says.
Debt crises, as witnessed recently in Greece and Argentina, can devastate economic growth, increase poverty and derail global agendas such as the UN Sustainable Development Goals and the Paris Agreement.
The meeting will be chaired by the Finance minister of Cyprus, Harris Georgiades, under the theme ‘Preventing Debt Crises: The Roles of Creditors and Debtors’. It will be preceded by sessions for senior finance ministry officials and central bank governors.
Ministers will explore policy options and strategies by which debtor countries can work with creditors to prevent the recurrence of debt crises.
Secretary general Patricia Scotland said: “The meeting comes at a time when global financial institutions, including the International Monetary Fund, have indicated another global debt crisis could be on the horizon.”
Ms Scotland will present findings of the 2019 Commonwealth Economic Development Report which examines the debt challenges member countries had to tackle in the aftermath of the 2008 global financial crisis.
“We have seen the calamitous impact that the Asian debt crisis and the 2008 global financial crisis had in our member countries of, and we know the grave threat that the recurrence of such crises would have on the health of the global economy.”
The statement noted that member countries are determined to work together to prevent crisis.
The ministers will also explore economic policy instruments to curtail rising household debt as well as how technological advancements and other approaches can promote debt transparency for improved risk assessment and debt sustainability.
The ministers will also consider ways in which the newly-developed Commonwealth financial technology (fin-tech) toolkit can be deployed to help countries create and share innovative, technology-driven responses to emerging financial challenges.
