Low and Middle-income Countries: Debt Restructuring
Debate between Lord Cameron of Chipping Norton and Lord Naseby(1 month, 2 weeks ago)
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Lord Cameron of Chipping Norton (Con)
It is very important that we provide alternatives to finance so that Commonwealth and other countries have a choice. I am very proud of the work I did to set up the Caribbean infrastructure fund, for instance, and we are looking again at whether we can refresh and renew that. We are also trying to get the multilateral development banks to expand their balance sheets and lend more to poorer countries. These are ways in which we can offer countries alternatives to Chinese finance in the way that he suggests.
Lord Naseby (Con)
My Lords, should we not look at the recent example of Sri Lanka, which decided that it had to seek the help of the IMF? The IMF responded speedily, but the problem was the private creditors and the time that took. Is there not a case for perhaps the IMF to produce some dimension whereby there is a structure that all private creditors can use, or be advised to use, so that a speedy decision is made for the benefit of the poor people who are suffering?
Lord Cameron of Chipping Norton (Con)
If bonds are the form of lending, there are collective action clauses that can prevent private sector hold-outs. With loans, you have these majority voting provisions so that a group of private investors cannot hold up the resolution of those debts. That is the right way forward. On Sri Lanka, we welcome the official creditor group deal that was reached on 29 November 2023; the bondholder committee is currently in negotiations with the Government of Sri Lanka. We do not comment on ongoing restructuring programmes, but we hope that a deal will be arranged soon.
Developing World: Debt Reduction
Debate between Lord Cameron of Chipping Norton and Lord Naseby(2 months, 2 weeks ago)
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Lord Cameron of Chipping Norton (Con)
I think that the noble Lord refers to what was agreed at the G8 in Northern Ireland in 2013, where a whole series of steps forward were made to make sure that companies were not doing what is known as base erosion and profit shifting and not paying their taxes in countries where they should. To be fair to the former Prime Minister, who is now the Foreign Secretary, we did make some progress, and I think the OECD would say that it has made a lot of progress, but I will certainly check up on the noble Lord’s point.
Lord Naseby (Con)
On the question of Sri Lanka, will my noble friend recognise the way in which Her Majesty’s Government, to whom I give particular thanks, through the IMF, were very firm to the Government of Sri Lanka about what they should do? The Sri Lankan Government responded, which means that the people of Sri Lanka can now move forward. I believe that that is as good a case history as we will find in recent times.
Lord Cameron of Chipping Norton (Con)
My noble friend is absolutely right that Sri Lanka is in debt distress; it has been working through a programme with the IMF. We wish the new Government in Sri Lanka well as they go through this and try to make sure that they can build a brighter future for that country.