Spill over of macroeconomic tightening of major economies, debt overhang need to be addressed: Janet Yellen
Live MintWar, debt and economics are set to dominate G20 leaders’ discussions over the next two days. US Treasury Secretary Janet Yellen on Thursday flagged the need for tackling challenges like the spill over effects of macroeconomic tightening in major economies to the rest of the world and the debt distress in vulnerable countries like Zambia and Sri Lanka, ahead of the crucial two-day meeting of finance and central bank governors starting in Bengaluru on Friday. Yellen, who met finance minister Nirmala Sitharaman and discussed cooperation on the evolution of multilateral development banks and India’s role in promoting sovereign debt restructuring, also highlighted the work needed for advancing global macro economy and resolving the food security issues exacerbated by the Russia-Ukraine war. Yellen also made it clear that Chinese entities dodging the sanctions on Russia will face consequences but sought China’s proactive role in resolving the debt distress in certain countries like Zambia and Sri Lanka. On sanctions and aid to Russia, Yellen said, “ We have made it clear that providing material support to Russia or assistance with any type of systemic sanctions evasion will be of very serious concern to us and we will certainly continue to make it clear to the Chinese government and to companies and banks in their jurisdictions about what the rules are regarding our sanctions and the serious consequences they would face for violating them.” With respect to debt, Yellen said she was hopeful that China will be constructive in understanding the need of countries like Zambia and Sri Lanka.