Pressure Mounts at IMF Against Blueprint for EM Debt Reworks.

World financial leaders are advocating for a revamp of the system for sovereign debt restructurings, which has left poor countries unable to access capital markets. The common framework initiative, created during the pandemic to assist poor countries in restructuring their debt, was a major topic of discussion at the International Monetary Fund's spring meetings. The current system has resulted in prolonged negotiations and defaults, with countries like Zambia, Ghana, and Ethiopia still in the process of negotiating their debt. The urgency to find a solution has increased due to the large debt payments faced by emerging-market governments, excluding China, this year. The involvement of Wall Street and China in the negotiations has sidelined traditional creditors, such as commercial banks and foreign governments. The common framework was intended to ensure equal burden-sharing among creditors, but the separate negotiations have made the process opaque. Measures announced recently may signal a turning point in incorporating China into the debt restructuring system, including allowing the IMF to lend to countries even during ongoing negotiations. However, concerns remain that the restructurings may only result in repayment delays rather than write-offs, leaving countries unable to pay in the long run. [Extracted from the article]