G-24 Urges Inclusive Growth and Debt Reform at Bangkok Meetings

Borrowing expenses and debt financing took the lead as the G-24 discussed the issue with reporters during the IMF and World Bank yearly gatherings in Bangkok, stated G-24 Chairman Taiwo Oyedele, who is Nigeria's Finance Minister and Coordinating Minister of the Economy. The chairman mentioned that global conflicts, changing trade rules, unstable commodity prices, and recurrent climate shocks have been major obstacles to worldwide growth.

However, Oyedele emphasized that embracing new technologies, such as artificial intelligence, without appropriate regulations can encourage expansion while also raising unemployment. "This is a joint responsibility for all of us to make sure that growth isn't merely for the sake of growth. It has to be job-rich and inclusive. And at the end of the day, it must result in improved living standards for our people," he concluded.

Iyabo Masha, the director of the G-24 Secretariat, echoed the chairman's sentiments during the same briefing. "If a nation does not have a stable microeconomic environment, it is not possible to implement structural job-related policies," she explained. Masha also stated that microeconomic stability is not a bad policy and complements other policies that promote economic growth. "If a nation doesn't have a stable microeconomic environment, it is not possible to build on structural job-related policies," she emphasized.

Oyedele further advised that paying off sovereign debt to support growth might seem reasonable, but countries must find a balance between tax collection and debt. "It is not one or the other," he said. "The ultimate objective of both tax and debt is to serve the people. If you always put the people at the core of your policies, it may not be perfect, but it will work and be sustainable."

Debt restructuring has significantly improved since Sri Lanka restructured its sovereign debt in December 2024, according to Masha, but it still hampers economic growth. The IMF's revised debt sustainability framework introduced new metrics that enhance the evaluation of a country's debt load and inform the amount of debt a nation should take on, she added.

Additionally, the Global Sovereign Debt Roundtable updated its restructuring playbook to assist countries in spending less time navigating the process. During the annual meeting, the Borrowers' Platform, supported by the UN Conference on Trade and Development, held its first Governing Council meeting. The platform offers debtor nations a platform to present their viewpoints and gain insight into sustainable debt practices and the most suitable form of debt for them.

"We've come a long way since Sri Lanka happened in 2023, but there is still a long way to go," Masha concluded. Rob Daly covers fintech and the economy. Contact him at rdaly@gfmag.com.