Rescuing Countries Facing Debt Stress in Uncertain Times: Sitharaman

Finance Minister Nirmala Sitharaman stressed the need to rescue countries facing debt stress due to the uncertainty caused by the pandemic and recent geopolitical developments.

In a meeting with World Bank Group President David Malpass on Friday, Sitharaman said India remained concerned about risks to the global recovery amid growing uncertainty amid heightened geopolitical tensions. .

The finance minister, who is traveling to the United States to attend the 2022 spring meetings of the IMF and the World Bank, suggested that multilateralism has become more critical as the world goes through a phase of exceptional uncertainty, according to a press release from the Ministry of Finance.

“Due to the pandemic and recent geopolitical developments, there is a need for the World Bank to come to the aid of countries facing debt stress. In particular, the World Bank must pay particular attention to Sri Lanka, which is facing an unprecedented economic situation,” she said.

Sri Lanka, a neighboring country to India, is grappling with the worst economic crisis in its history, compounded by currency shortages and a balance of payments crisis.

The country’s economic crisis is caused in part by a lack of foreign currency, which means the country cannot afford to pay for imports of basic foods and fuel, leading to acute shortages and very high prices. students.

The island nation is witnessing large-scale protests against the government’s handling of the debt-ridden economy – the worst economic crisis in Sri Lanka’s history.

During the meeting, the finance minister said India’s response to the pandemic has focused on the twin objectives of saving lives and livelihoods.

India has successfully carried out the second largest vaccination program in the world, administering more than 1.85 billion doses of the vaccine, she said.

She also spoke about the impact of the Russian-Ukrainian conflict on the world economy and India in particular; economy and role of the World Bank Group; Single borrower limit and exploring the possibility of guarantees from other countries and India’s G20 Presidency.

Sitharaman highlighted India’s roadmap for infrastructure development and said the country looks forward to continued support from the World Bank for investment financing for the National Infrastructure Pipeline and Gati Shakti program.

Last year, Prime Minister Narendra Modi launched a Rs 100 lakh crore national master plan for multimodal connectivity which aims to develop infrastructure to reduce logistics costs and boost the economy.

PM Gati Shakti aims to reduce logistics costs, increase cargo handling capacity and reduce turnaround times. The plan aims to give more power and speed to projects by connecting all relevant departments on a single platform.

Attending the 105th Plenary Meeting of the Development Committee, the Finance Minister said that India’s economic growth in the current year is robust and the highest among all major economies and reflects resilience and India’s strong recovery.

According to the 2021-22 Economic Survey, India’s economy is expected to grow by 8-8.5% at the start of the fiscal year on April 1 and is well placed to meet future challenges thanks to widespread vaccination coverage, health reforms. supply side and regulatory relaxation.

Agenda items included digitalization and development, servicing debt for development and macroeconomic stability, and the World Bank Group’s response to the global impacts of the war in Ukraine: a scorecard. proposed route, according to a separate statement.

In her address to this session, the Minister of Finance pointed out that India has voluntarily offered the COVID Vaccine Intelligence Network (CoWIN) platform to all countries and is willing to provide assistance to other intelligence platforms. public goods, recognizing the importance of replicating proven and scalable digital platforms.

She also drew the attention of the distinguished assembly of the meeting to the unprecedented situation in Sri Lanka and hoped for decisive relief for the island nation.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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John A. Bogar