(Bloomberg) — The International Monetary Fund’s chief set an ambitious target to reduce the time needed to agree on deals to help poorer nations in debt distress, following criticism it’s been taking too long to aid the world’s neediest nations.
(Bloomberg) — The International Monetary Fund’s chief set an ambitious target to reduce the time needed to agree on deals to help poorer nations in debt distress, following criticism it’s been taking too long to aid the world’s neediest nations.
Managing Director Kristalina Georgieva said she wants to reduce to just 2-3 months the time between when countries with distressed debt reach a staff-level deal with the institution to when they secure the creditor assurances needed for loan approval.
“That can only be done by practically identifying what are the steps, and then getting creditors to agree to march on the same tune so resolution can happen faster,” Georgieva said in an interview with Bloomberg TV’s Tom Keene at the annual meetings of the IMF and World Bank in Marrakech, Morocco. “We want to go down to two to three months.”
The lender of last resort’s leader said on Friday that the global sovereign debt roundtable forum that she created at the start of the year with the World Bank and Group of 20 to bring together various groups involved in restructurings — including China and private creditors — is helping shorten the time needed.
Georgieva noted that it took Chad 11 months; Zambia 9 months; Sri Lanka 6 months; and Ghana 5 months.
Read more: IMF Talks on Debt Deadlock Stuck Between China, Private Lenders
International organizations are making a concerted push to find ways to simplify and hasten debt restructurings amid criticism they’ve taken too long in the past. Rapidly rising US bond yields have added to the urgency, choking off demand for developing countries’ debt and pushing some closer to default.
Georgieva said that her “heart bleeds” for the people in Israel who died in an attack last weekend by the Hamas terrorist group, as well as the civilians in Gaza who are paying a “high price.”
She said other institutions are better-positioned to bring together the two parties at a political level, and that the IMF has a duty to maintain neutrality in order to provide objective policy advice.
Speaking at the first IMF and World Bank meetings to be held in Africa in a half century, she said that the continent can be an engine for the global economy.
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