Treasury Official Describes Progress in Debt Restructuring for Vulnerable Countries

As we approach the end of 2023, global macroeconomic conditions remain difficult for many vulnerable low-income countries. But there are signs of potential improvement, with several of these countries now seeing some progress in the efforts to get their debts restructured.

Brent Neiman, Assistant Secretary for International Finance at the U.S. Department of the Treasury, offered this assessment in a discussion at Johns Hopkins University Bloomberg Center on October 23, 2023.

Neiman’s remarks were part of the Dean’s Speaker Series, organized by the Johns Hopkins School of Advanced International Studies (SAIS), which invites a broad array of prominent policy practitioners and business leaders for insightful perspectives and thought-provoking discussions of international issues, leadership, and other relevant topics.

As examples of recent progress in what he described as “debt treatment,” Neiman cited the cases of Zambia, Ghana, and Sri Lanka, all three of which have reached restructuring agreements with their official creditors within the past year, after initial delays.

In explaining what helped push each of these restructurings toward the finish line, Neiman stated: “I think it has made a big difference that global leaders have decided to elevate this topic toward the top of the international economic agenda. President Biden and [U.S. Treasury] Secretary [Janet] Yellen both view low-income and emerging-market debt distress as a critical issue and make a point of raising it in discussions with their counterparts.”

It is important that we avoid lengthy delays in future sovereign debt restructurings for low-income countries and emerging markets.

Brent Neiman, Assistant Secretary for International Finance, U.S. Department of the Treasury

Neiman said that improving the overall debt architecture and offering relief for a productive path forward to countries in debt distress is a major priority for the U.S. Treasury Department. “It is important that we avoid lengthy delays in future sovereign debt restructurings for low-income countries and emerging markets,” he added. “In addition to their direct economic costs, such delays risk that the borrower’s government loses momentum or that popular and political support for reforms erodes.”

Neiman emphasized that borrowers and creditors would need to build on the recent progress, and the International Monetary Fund (IMF) and the World Bank must continue to facilitate it. “Debt distress in low-income countries and emerging markets will remain a major priority for us at Treasury and, I hope, will continue to be a key focus of international economic policymaking,” he said.

At Treasury, Neiman engages in a broad variety of international economic priorities, including the response to Russia’s war against Ukraine, cross-border debt issues, IMF governance, global financial regulation and supervision, digital assets, and key bilateral issues with various countries. Before joining the Treasury department, Neiman was the Edward Eagle Brown Professor of Economics at the University of Chicago’s Booth School of Business. His teaching and research focused on international macroeconomics, finance, and trade.

Neiman received a Bachelor of Science in economics and applied science from the University of Pennsylvania. He earned a master’s degree in mathematical modelling from Oxford University, and his PhD in economics from Harvard University.