Status: Draft -- Not PublishedWill be live at 04/09/2021 15:32
IIF Letter to the G20 on Common Framework, Debt Transparency, ESG Considerations
In light of the 2021 Spring Meetings of the World Bank Group and International Monetary Fund, and as implementation of the Common Framework for Debt Treatments beyond the DSSI takes shape, this letter provides private sector views that build on our November 2020 letter to the G20.
- The pandemic has underscored a fundamental tenet of the Principles for Stable Capital Fair Debt Restructuring: that sovereign debt crisis prevention and resolution is a shared responsibility between public and private sector creditors, the international financial institutions, and sovereign borrowers.
- An appropriate forum for creditor coordination is urgently needed. The G20 has called for all G20 and Paris Club creditors to coordinate engagement with debtor countries, and that the negotiation “…be held in an open and transparent manner and before finalization of the key parameters.” We believe that this engagement should include private sector creditors early in the process via regular briefings and consultation.
- Reflecting lessons learned, the Principles Consultative Group of the Group of Trustees of the Principles for Stable Capital Flows and Fair Debt Restructuring will be updating the Principles in 2021.
- There is a need for improved sovereign debt transparency, and the multiple ongoing efforts to improve sovereign debt transparency are complementary and should be rapidly advanced and integrated.
- Current conditions have created tremendous opportunity to develop new sources of capital for emerging and developing economies, supported by innovative public-private sector partnerships including blended and credit-enhanced financing for sustainable infrastructure and other ESG-linked use of proceeds or sustainability-linked debt raising transactions.
These perspectives are informed by discussions with the IIF Committee for Sovereign Risk Management, the Principles Consultative Group of the Group of Trustees of the Principles for Stable Capital Flows and Fair Debt Restructuring, and the IIF Debt Transparency Working Group, as well as the IIF Sustainable Finance Working Group.