As global financial institutions warn of a pending international debt crisis, Commonwealth finance ministers are to look at ways in which debtor and creditor countries can work together to prevent future crises.
The ministers from the 53-member organisation will meet in Washington on Thursday on the sidelines of the ongoing World Bank/IMF Annual Meetings.
Commonwealth Secretary-General Patricia Scotland said: “The meeting comes at a time when global financial institutions, including the International Monetary Fund, have indicated another global debt crisis could be on the horizon.
“We have seen the calamitous impact that the Asian debt crisis and the 2008 global financial crisis had in our member countries of, and we know the grave threat that the recurrence of such crises would have on the health of the global economy.
“So, the countries of the Commonwealth are determined to work together to prevent this from happening.
“The finance ministers of our member nations will explore economic policy instruments to curtail rising household debt and how technological advancements and other approaches can promote debt transparency for improved risk assessment and debt sustainability,” she added.
The Finance Minister of Cyprus, Harris Georgiades, is going to chair the meeting, under the theme “Preventing Debt Crisis: The Roles of Creditors and Debtors”.
The Secretary-General would present findings of the 2019 Commonwealth Economic Development Report, which examines the debt challenges member countries had to tackle in the aftermath of the 2008 global financial crisis.
The ministers would also consider ways in which the newly-developed Commonwealth financial technology (fin-tech) toolkit could help countries create and share innovative, technology-driven responses to emerging financial challenges.
Earlier in London, Commonwealth trade ministers had called for resistance to protectionism and reform of the World Trade Organisation (WTO), which sets the global rules for international trade.
The ministers said they supported free trade in “a transparent, inclusive, fair and open multilateral trading system, with the WTO as its core institution”.
They agreed that any WTO reform should take into account the positions of developing and the least developed countries, and small and vulnerable economies, including Small Island Developing States (SIDS).
The ministers also endorsed an action plan to boost trade among their countries to at least $2 trillion by 2030 through the Commonwealth Connectivity Agenda.
Intra-Commonwealth trade is projected to hit $700 billion by next year.
Secretary-General Scotland said: “The multilateral trading system is the only way for our countries, as diverse as they are, to trade in a predictable, stable, transparent and fair environment.
“While the global trading system may be far from perfect, it is the surest pathway towards eradicating poverty.
“Building on this, the Commonwealth Connectivity Agenda will help businesses, including micro, small and medium-sized enterprises, to plug into global trade networks and benefit from world trade.
“In this way, intra-Commonwealth trade offers immense opportunities to contribute to reducing poverty and achieving sustainable development,” she added.
UK Secretary of State for International Trade and President of the Board of Trade Liz Truss, who chaired the meeting, noted: “The UK along with its Commonwealth partners has today clearly set out its commitment to fight against protectionism.
“We must work together to promote free trade and reform the multilateral system to make sure it works for every nation, small or large.
“Trade has the power to drive growth, jobs and opportunities – it is an essential tool in the fight against extreme poverty and insecurity.”
She added: “By sharing experience across the diverse Commonwealth community, we can help to break down existing barriers to trade which currently prevent businesses in all our countries from trading successfully.”
The ministers called for an end to the deadlock over the WTO’s Appellate Body – a key panel of judges, whose rulings help resolve trade disputes.
The US has been blocking new appointments to the Appellate Body for the past 18 months, and trade experts warn that it would cease to exist in December if the impasse continues.
From its original membership of seven members, this is now down to four and will leave only one member by the end of this year if the appointments are not made.
The US delegation to the WTO is insisting that it only wants to see the Appellate Body stick to its terms of reference for dispute settlement.
The US and some WTO members argue that the Appellate Body is overextending its responsibilities and authority.
For Commonwealth trade ministers, they want updated WTO rules to deal with new challenges and opportunities, including e-commerce.
They support a global agreement that would prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and eliminate subsidies that contribute to illegal, unreported and unregulated fishing by the end of 2019.