U.S. Treasury official says G20 debt-relief scheme must be transparent

"Continuing vigilance" is needed to check that China and other countries participate transparently in a Group of 20 debt-relief framework, U.S. Treasury Undersecretary for International Affairs Brent McIntosh said on Tuesday.

"Continuing vigilance" is needed to check that China and other countries participate transparently in a Group of 20 debt-relief framework, U.S. Treasury Undersecretary for International Affairs Brent McIntosh said on Tuesday. Leaders of the world's 20 biggest economies last month endorsed a plan to extend a freeze in debt-service payments by the poorest countries to mid-2021 and agreed to a common approach for dealing with debt problems beyond that.

"We're going to need to see (if) countries actually participate fully and transparently here. Will the Chinese banks in particular participate in a way that's robust and transparent to help out the countries that desperately need this aid?," McIntosh said in an online event hosted by the Milken Institute. "It's going to require continuing vigilance," he said. "Making sure that we are carefully monitoring whether it gets implemented fully and transparently is going to be an effort over a period of months and years."

McIntosh also saw room for extra economic support in response to COVID-19 even as international collaboration over its fallout among G20 nations as well as institutions such as the Financial Stability Board has been beneficial. "There's a need for additional economic aid that will be a bridge between where we are now and the time of widespread vaccination," he said.

McIntosh added that the G20's debt-suspension initiative has helped 46 countries defer more than $5 billion in debt service payments, adding that delaying debt payments by itself was not going to be enough for all countries. "There are a number of countries where because of already unsustainable debt levels exacerbated by the pandemic, they're facing a need for debt relief," he said.

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