Breaking News

Developing countries must tackle debt together: FM

Finance Minister and Media Minister Mangala Samaraweera addressing the inaugural session of the G-24 meeting at the BMICH yesterday.State Minister Eran Wickremeratne, Central Bank Governor Dr. Indrajith Coomaraswamy, Finance Ministry Secretary Dr. R.H.S. Samaratunge and delegates from the International Monetary Fund and the World Bank were present. Picture by Wasitha Patabendige

Finance Minister Mangala Samaraweera warned that with advanced economies rebounding, developing countries must prepare for tightening global market conditions, at the opening meeting of the G-24 in Colombo, yesterday .

“It is clear that Sri Lanka, like many developing nations, (faces) refinancing risks in the coming years,” Minister Samaraweera said at the BMICH yesterday. “This warrants a concerted and coordinated policy response to mitigate such risks.” The G-24 meets every year to coordinate the development strategies of its member countries and make sure their interests are represented in international financial monetary matters.

The G-24 comprises developing countries in Asia, Africa and Central and South America. Minister Samaraweera is chairing the group this year on behalf of Sri Lanka. The theme of this year’s meetings is debt management and sustainability.

“(It’s) a very timely theme,” Samaraweera said. With an economic rebound leading to increasing interest rates, the International Monetary Fund’s latest global outlook predicts that “economies with high gross debt refinancing needs and un-hedged dollar liabilities (would be) particularly exposed to financial distress,” he said. Samaraweera said that according to the IMF’s Fiscal Monitor, over 90 percent of low-income developing countries had debt levels over 30 percent of their GDP at end 2016. Sri Lanka’s debt to GDP ratio stands at about 80 percent.He said the countries must work together to develop policy frameworks to reduce their financial exposure.

“You would, I am certain, ensure that our common interests are fairly and adequately addressed at the forthcoming Bretton Woods meetings in Washington D.C.,” he said.

The G-24 is meeting for two days in Colombo ahead of a conference of representatives of global financial leaders like the IMF and World Bank in April.