Paris Forum: Successful debt treatments for future investment

PARIS FORUM: THE 11^TH ANNUAL CONFERENCE OF THE PARIS CLUB ADRESSES SUCESSFUL DEBT TREATMENTS FOR FUTURE INVESTMENT

The 11^th edition of the Paris Club annual meeting, known as the Paris Forum, took place on 26 June 2024, at the French Ministry for Economy, Finance and Industrial and Digital Sovereignty, with the support of the Brazilian Presidency of the G20.

The Forum is aimed at facilitating open discussions on debt challenges and share potential solutions to prevent and address debt crises in developing countries. This edition, titled Successful debt treatments for future investment, emphasized the link between concluding a debt treatment, which helps to restore macroeconomic stability, and the conditions for growth and development via new investment. It was an opportunity to reflect on the state of global sovereign debt issues, and the challenges faced by developing countries that have restructured their debt to be able to invest again in their future, to meet the challenges of sustainable development and continue the fight against climate change. A technical workshop has also been dedicated to the key principle of Comparability Treatment, which has kept creditors busy since 2023. This issue of Comparability of treatment is key to ensure a fair burden-sharing of efforts between public and private creditors.

The Paris Forum is a unique platform for exchanges among creditors (both public and private, Paris Club and other official creditors), borrowing countries, international institutions, researchers and NGOs on sovereign debt. The event also saw the participation of around twenty borrowing countries, represented by a dozen ministers, as well as academics, NGOs, and representatives from around thirty private sector organisations, mainly banks and asset managers exposed in frontier markets.

The Paris Club remains steadfast in its commitment to promoting sustainable debt practices and coordinated solutions in cases where debt treatments become necessary. This commitment will persist within various relevant fora, primarily within creditor committees, which are responsible for negotiating restructurings. As part of its unwavering commitment, the Paris Club will also continue to actively contribute to the work of the G20's International Financial Architecture Working Group.

In the margins of the Forum, the Co-chairs of the Committee of Public Creditors for Sri Lanka initiated the signature of the country's debt restructuring agreement, alongside China's Exim Bank own agreement with Sri Lanka, in support of the authorities' efforts.

Background notes

1. The Paris Club was formed in 1956. It is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrower countries.

2. The 22 members of the Paris Club are: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Korea, the Netherlands, Norway, Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States of America. South Africa has been a prospective member since 2022.

3. France, India and Japan co-chair the Committee of Public Creditors for Sri Lanka. The members of the Paris Club which are part of the Committee are Australia, Austria, Belgium, Canada, Denmark, France, Germany, Japan, Korea, the Netherlands, Russia, Spain, Sweden, the United Kingdom, the United States of America. The committee includes India and Hungary, in addition to the Paris Club creditors.

Credit @PBagein