With reference to the "G20 Common Framework", consider the following s

With reference to the “G20 Common Framework”, consider the following statements:

It is an initiative endorsed by the G20 together with the Paris Club.
It is an initiative to support Low Income Countries with unsustainable debt.

Which of the statements given above is/are correct ?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC IAS – 2022

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Statement 1 is correct. The G20 Common Framework for Debt Treatments beyond the DSSI was agreed upon by the G20 and the Paris Club (an informal group of official creditors, mostly high-income countries) in November 2020. It provides a structure for coordinated debt restructuring for eligible countries.
Statement 2 is correct. The Common Framework is specifically designed to help Low-Income Countries (LICs) that are eligible for the World Bank-IMF’s Debt Service Suspension Initiative (DSSI) and have unsustainable debt burdens. It aims to provide debt relief beyond temporary suspension, on a case-by-case basis, in a coordinated manner involving both official and private creditors.

The G20 Common Framework is an international initiative to address the debt vulnerability of low-income countries exacerbated by global shocks like the COVID-19 pandemic. It involves key creditors like G20 and Paris Club members.

The framework encourages comparable treatment from private creditors to ensure fair burden sharing. Implementation has faced challenges, including delays in setting up creditor committees and coordinating diverse creditor bases.

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