US Treasury Secretary Janet Yellen will travel to India next week for G20 finance meetings that will focus on unblocking distressed-country debt restructuring, boosting support for Ukraine and reforming multilateral development banks.
Yellen will join fellow G20 finance ministers and central bank governors in Bengaluru on Feb. 23-25, spanning the first anniversary of Russia’s invasion of Ukraine.
A senior Treasury official told reporters on Friday that Yellen would take every opportunity to criticise Russia’s actions and to work with allies to try to mitigate spillovers that the conflict has caused, including addressing food insecurity and high energy prices.
Yellen will also emphasise the need to increase financial support for Ukraine, including a new International Monetary Fund loan program, the official said.
“I wouldn’t expect her to engage with Russian counterparts in any way other than to forcefully refute any incorrect statements they make during the meetings,” the official said. “And to be very direct in her criticism of Russia and Russia’s war.”
The official said Yellen had no meetings with Chinese counterparts to announce at present. Yellen said last week that she hopes to travel to China for high-level economic meetings, but the timing was uncertain as the State and Defense departments were leading the US response to the incident involving a downed Chinese surveillance balloon earlier this month.
PRESSING FOR DEBT RELIEF
At the G20 meetings, Yellen will press China to “quickly deliver” on debt relief for distressed low- and middle-income countries, the official said.
China is due to participate in a debt roundtable discussion on Feb 25, organised by host India, the IMF and the World Bank, that will focus on broader issues that are creating roadblocks to debt relief deals for Zambia, Sri Lanka and other countries.
An initial virtual meeting of the debt roundtable got underway on Friday, with private creditors BlackRock and Standard Chartered participating.
Among the sticking points is China’s insistence that the World Bank and other multilateral lenders share in the pain of taking debt “haircuts.”
The official said the Treasury would “love” to see a deal struck on Zambian debt at the meetings, but the roundtable’s main purpose is to make sure that a range of creditors and borrowers, including private sector creditors, all understand the types of, and how to define, common treatment of creditors.
“I wouldn’t say the sovereign debt roundtable is about China specifically. It’s about trying to make sure that we have a functioning common framework and a functioning way to get to that treatment,” the official said.
WORLD BANK REFORMS
Yellen will also press for consensus on reforming multilateral development banks to vastly expand their lending to tackle pressing global challenges such as climate change and conflict, while maintaining their core missions of reducing poverty, the official said.
The issue was drawn into sharper focus this week by World Bank President David Malpass’ surprise early departure announcement.
The Treasury official said that the bank’s evolution would be a major topic of discussion and that the entire department was focused on ensuring that multilateral development banks were “fit for purpose in the 21st century.”
The Treasury said Yellen will hold a news conference on Feb 23 and will hold bilateral meetings in Bengaluru with the finance minister of India, Nirmala Sitharaman, and Britain’s Chancellor of the Exchequer Jeremy Hunt.
