Colombo (LNW): The U.S. Treasury sees signs of potential improvement in sovereign debt restructuring, with countries like Zambia, Ghana, and Sri Lanka making progress in the past year, Reuters reported.
Treasury Assistant Secretary Brent Neiman expressed hope for Ghana’s external restructuring agreement in the upcoming weeks but emphasised the need for swifter actions.
Neiman, speaking at the Johns Hopkins School for Advanced International Studies, noted the global attention to debt issues and mentioned the Global Sovereign Debt Roundtable’s efforts in achieving common terms for debt.
Discussions have also touched on state-contingent debt instruments, which could be pivotal when creditors have disagreements on a borrower’s prospects.
Neiman highlighted the significance of restructuring domestic debt but warned against a stringent approach that might hinder the process.
“We clearly haven’t gone far enough or fast enough and much more work remains,” Neiman said.
“The critical test of any progress will be whether it is sustained when, as seems likely, more countries come forward requesting debt treatments,” he went on, pointing out that nonetheless, he is hopeful that their recent efforts are yielding some movement toward an improved international debt architecture that can help low- and middle-income countries when they need it.
