INTERVIEW: World Bank Exec Pins Hopes on Japan-India Leadership

Washington, Feb. 19 (Jiji Press)--Indermit Gill, senior vice president for development economics and chief economist at the World Bank, has expressed his expectations that Japan and India, which hold the Group of Seven and Group of 20 presidencies, respectively, this year, will show leadership in advancing negotiations on debt relief for developing countries facing financial difficulties. Criticisms have been raised that China, the largest bilateral lender to low-income countries, is the main impediment in debt relief discussions. Gill pointed to China's lack of experience as one factor. Unlike Japan, the United States, European nations and other members of the Paris Club of major creditor countries, "this is the first time that the Chinese are in this situation" where they are being asked to reduce or cancel debt, he said in an interview with Jiji Press. He also noted that China is experiencing trouble in its own financial sector due to a real estate slump, "It's not as if...they can take on even more bad debt." Gill emphasized that the structure of debt "has changed a lot in the last 20 years," with non-Paris Club members such as China, India and Saudi Arabia providing larger amounts of loans to low-income countries than G-7 nations while a portion of low-income countries have been able to raise private capital from markets. In order to implement debt reductions under "the new structure," it is necessary to establish trust among a wide range of stakeholders, he suggested. The World Bank will co-host a "roundtable" with the International Monetary Fund and India regarding the debt problem that will coincide with a three-day meeting of G-20 finance ministers and central bank chiefs in Bangalore, India, from Thursday. Gill underscored that at the roundtable, advanced economies such as Japan, the United States and the European Union should start building trust with China and other emerging market countries. However, he warned not to "have too high expectations of the debt roundtable," hinting at tough times ahead. While the interests of countries concerned are complicated, Gill highlighted "good relations" and "much trust" between the G-7 chair, Japan, and the G-20 chair, India."It's a very good coincidence, so for that reason, I'm optimistic," he said. "Let's hope something good comes out of" the roundtable, Gill added. END