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GITFic; CALL FOR STRATEGIC ROAD MAP AND URGENT CALL FOR ACTION .

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The press briefing and recommendations by GITFiC highlight the key role of strategic intervention in addressing the Global Debt crisis. The recommendations provide a roadmap for governments and international bodies to navigate the challenges posed by the crisis. Here’s a breakdown of the key points and their implications:

1. Restructuring Global Debt:

  • Focus on Productive Spending: Emphasis is placed on restructuring the Global Debt crisis to correspond with more productive spending. Governments are advised to reduce unproductive, non-essential expenditures, and low-priority capital investments.
  • Targeted Fiscal Policies: Governments are urged to carefully target the most productive uses for public investment, aligning fiscal policies with sustainable growth and shared prosperity.

2. Global Debt Initiative:

  • Preventive Measures: The Global Debt initiative aims to prevent a potential wave of the crisis. The call is made to reboot liquidity and restructure debt in a way that promotes economic stability.
  • Maximize Effectiveness: GITFiC recommends maximizing the effectiveness of current efforts, potentially through more extensive debt service moratorium initiatives as part of the #GlobalDebtInit
  • Focus on Productive Spending: Emphasis is placed on restructuring the Global Debt crisis to correspond with more productive spending. Governments are advised to reduce unproductive, non-essential expenditures, and low-priority capital investments.
  • Targeted Fiscal Policies: Governments are urged to carefully target the most productive uses for public investment, aligning fiscal policies with sustainable growth and shared prosperity.
  • Preventive Measures: The Global Debt initiative aims to prevent a potential wave of the crisis. The call is made to reboot liquidity and restructure debt in a way that promotes economic stability.
  • Maximize Effectiveness: GITFiC recommends maximizing the effectiveness of current efforts, potentially through more extensive debt service moratorium initiatives as part of the #GlobalDebtInitiative.

3. Bold New Initiatives:

  • Collaborative Solutions: African countries are urged to collaborate with creditors and establish bold new initiatives that go beyond temporary suspensions. Suggestions include creating a debt exchange mechanism through a Special Purpose Vehicle (SPV), generating new Special Drawing Rights (SDRs), and improving debt swap mechanisms.
  • Reevaluate Debt Sustainability: The criteria for debt sustainability need to be redefined in light of the COVID-19 crisis. All parties, including creditors and debtors, should contribute to adapting and improving standards for prudent debt practices and sustainable development.

4. Reforming International Debt Architecture:

  • Timely Debt Restructuring: A critique of recent debt restructurings reveals that they often came too late and were insufficient. There’s a call for the international debt architecture to align with the current global debt dynamic.
  • IMF Assessment: The International Monetary Fund (IMF) is mentioned as having assessed recent debt restructurings, emphasizing the importance of reforms to restore debtor countries to debt sustainability and access.

5. Enhancing Public Investment and Financial Management:

  • Crucial Financial Management: The history of increased borrowing in Africa suggests that enhancing public investment and financial management is crucial. The implication is that better management practices are needed to address the challenges associated with rising debt.

In summary, the recommendations underscore the need for a comprehensive and collaborative approach to address the Global Debt crisis, involving both preventive measures and bold new initiatives to ensure sustainable and inclusive economic growth.

REPORT BY Jessica Okai

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