By Andualem Sisay Gessesse (Marrakech, Morocco)- The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) today called for an urgent need for reform of the multilateral system to address global challenges.
At the press conference held in Marrakech, Morocco on the sidelines of the annual meetings of the International Monetary Fund (IMF) and the World Bank (WB), the representatives of G-24 call for the cancellation of debt for the highly indebted countries as well as restructuring of debt.
“We are not saying debt should be cancelled for all countries…We are saying that the G-20 Framework hasn’t failed…All creditors should be on the table including private creditors in order to find solutions to address growing debt burden of the highly indebted countries,” said Adama Coulibaly, minister from Ivory Coast – outgoing chair of the G-24.
The G-24 includes India, China, Pakistan, Nigeria, Brazil, Mexico, Ethiopia, Philippines, Egypt, Dr Congo, Iran, South Africa, Kenya, Colombia, Argentina, Algeria, Morocco, Peru, Ghana, Ivory Coast, Venezuela, Syria, Sri Lanka, Ecuador, Guatemala, Haiti, Lebanon, Gabon, and Trinidad and Tobago.
In a statement issued following the press conference the G-24 stated that the global economic landscape is uncertain, with any countries affected by declining access to and tight external finance conditions, high debt levels and rising inflation.
The Group called for a variety of steps to increase the financing available to developing countries. They asked for allocation of new Special Drawing Rights, the IMF’s reserve currency; reform of IMF short-term financing instruments; increased concessional resources to low income countries; reform of the IMF’s surcharge policy; increased channeling of SDR from donor countries to needy countries and increase of the Fund’s resource base through its 16th General Review of Quotas.
“Member countries awere of the view that these recommendations would provide additional financing for members to mitigate shocks and invest in climate action and sustainable development. Debt relief: G-24 members expressed concern about high and increasing public debt levels, with many developing countries carrying unsustainable debt burden.”
The statement also indicated that “while members welcome the G-20 Common Framework, they noted that some of the poorest and most vulnerable countries are excluded from the benefits of debt relief. The G-24 called for a durable debt resolution for these countries. Reforms of the Bretton Woods Institutions: G-24 members expressed their concern with the progress on IMF general quota review. They reiterated their call for the IMF to remain a quota-based institution in order to bolster the voice and representation of emerging market and developing economies, who now account for a larger share of world GDP.”
“Additionally, they recommended further pursuit of governance reforms aimed at correcting regional underrepresentation in the IMF. While welcoming the World Bank reform program to expand its mandate, better utilize resources, and improve operating efficiencies, G-24 members called for more concessional lending, especially for investments in global public goods and sustainable development such as affordable water and energy,” it said.
The Group also called for reforms of international taxation and trade. “Members welcome the United Nations Secretary-General’s Inclusive and Effective Tax Reform agenda and called for a multilateral consensus to drive enduring progress on the initiative as it would foster a more just and balanced international tax system.
“On trade, members noted the rising trend in protectionist policies, especially from the largest economies, has adverse repercussions on global integration and trade. They noted that developing countries experience unequal distribution of the benefits of trade, limited market access and unfair trade practices, especially in the agriculture sector, which is often the main source of livelihood for the poor. They therefore called on the Breton Woods Institutions (BWI) to lend their support to reforms of the multilateral trade system,” noted the statement.
In 2022, global public debt – comprising general government domestic and external debt –
reached a record USD 92 trillion. Developing countries owe almost 30% of the total, of which
roughly 70% is attributable to China, India and Brazil, according to the latest report on global debt by a UN agency.