US Treasury Secretary: Addressing Sovereign Debt Issues in Emerging Markets and Developing Economies a Core Priority for the G20

Washington, Jan 1 (KUNA) — U.S. Treasury Secretary Scott Bessent underscored on Tuesday the critical importance of addressing sovereign debt issues in emerging markets and developing economies, calling it a “core priority” for the Group of Twenty (G20). Speaking on the second and final day of the G20 meetings held in Asheville, North Carolina, Bessent said the United States is “leading the G20’s efforts to address key sovereign debt issues, strengthen financial markets, and bolster the global economy in support of our fundamental goal of achieving stronger global growth.” He emphasized that addressing sovereign debt challenges in emerging markets and developing economies is “an extremely important issue,” noting that it has long been “a core priority for the group since its inception.” He pointed out that its significance lies in the fact that “debt crises can isolate countries from market financing, hinder growth prospects, and trigger a negative spiral of declining economic activity, which in turn reduces repayment capacity.” Bessent clarified that the United States has “played a leading role for decades in addressing sovereign debt issues in emerging markets and low-income countries to support the functioning of financial markets, strengthen the global economy, and return debtor countries to a path of stability and growth.” He noted that “when sovereign debt is well managed and supported by strong macroeconomic policies, its issuance can stimulate investment in education, health, and infrastructure, leading to sustainable economic growth and improved living standards,” adding that this requires “strong institutional capacities, robust governance frameworks, and effective enforcement mechanisms, along with transparent, accurate, and timely information on debt volumes, terms, and arrangements.” He expressed his belief that “this is precisely the type of problem the G20 was created to address, as the group brings together many of the world’s largest official creditors and some of the largest borrowing countries, giving the group both the responsibility and the capacity to act.” He stressed that “future work must address borrowers’ capacity constraints, explore ways to support external creditors in managing liquidity, and make further progress toward greater transparency in debt data from creditors.” (End) R.S.R. / R.J.