Jayati Ghosh: Latest News

Some of the world’s most powerful hedge funds and other investors are holding up vital help for crisis-hit Sri Lanka by their hardline stance in debt-relief negotiations after the Asian country’s $51bn (£42bn) default last year, according to 182 economists and development experts from around the world.Instead of geopolitical manoeuvring, all of Sri Lanka’s creditors must ensure debt cancellation sufficient to provide a way out of the current crisis, said a statment from the economists and experts on Monday (9).In a statement the group that said that extensive debt cancellation was needed to give the economy a chance of recovery and that Sri Lanka would be a test case of the willingness of the international community to tackle a looming global debt crisis.The group – including the Indian economist Jayati Ghosh, Thomas Piketty, the author of the bestselling book Capital, and Greece’s former finance minister Yannis Varoufakis – said private sector creditors such as investment companies and hedge funds were preventing a deal.Private creditors own almost 40% of Sri Lanka’s external debt stock, mostly in the form of international sovereign bonds, although the higher interest rates levied on the bonds mean they receive more than 50% of external debt payments.Such lenders charged a premium to lend to Sri Lanka to cover their risks, which accrued them massive profits and contributed to Sri Lanka’s first ever default in April 2022, said the statement."Lenders who benefited from higher returns because of the “risk premium” must be willing to take the consequences of that risk. Indeed, ISBs are now trading at significantly lower prices in the secondary market.

ALSO READ: How would you define freebies? Poor entitled to ‘basic needs', says Jayati Ghosh Among other things, the UP CM said that it is a matter of pride that the country has emerged as the fifth largest economy in the world, adding, India's ability is being recognised at the global platform under the leadership of Prime Minister Narendra Modi. Meanwhile, in August renowned economist Jayati Ghosh said that 'basic needs' like nutrition, healthcare, housing and education, which the government should provide for its citizens, are not freebies.