• The Paris Club is a group of mostly western creditor countries that started in 1956 when Argentina decided to meet its public creditors in Paris.
• It says that it is a place where official creditors get together to help countries that are having trouble paying their bills.
Their goal is to find long-term ways for countries that can’t pay back their bilateral loans to get out of debt. The “G20 Common Framework” is an effort backed by both the G20 and the Paris Club.
• Other creditor countries can join negotiations on a case-by-case basis, as long as they meet certain requirements.
• They meet once a month in Paris, except in February and August.Each meeting has a “Tour d’Horizon” that lasts one day. During this time, creditors talk about the foreign debt of debtor countries or how those countries are handling their debts.
• The Paris Club invites debtor nations to a meeting with their creditors after the country has finished an appropriate programme with the IMF that shows it can’t pay its external debt obligations and needs a new payment plan with its foreign creditors. • Representatives of the World Bank, the IMF, and other international institutions, as well as the relevant regional development bank, may also attend the meeting as observers.
• The debtor country is usually represented by its Minister of Finance, who is in charge of a group of people from his or her office and the central bank.
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Japan, Netherlands, Norway, Russia, South Korea, Spain, Sweden, Switzerland, the United Kingdom, and the United States are all members. Most of the members of this group are also members of the Organisation for Economic Co-operation and Development (OECD).
• According to its official website, the Paris Club has reached 478 agreements with 102 different debtor countries. • Since 1956, USD 614 billion worth of debt has been treated in the framework of Paris Club agreements. • The Paris Club works on the principles of consensus and solidarity, and any agreement reached with the debtor country applies equally to all Paris Club creditors.In the last century, the club was the most important bilateral lender, but China has since become the largest bilateral lender in the world, making the club less important.
Organisation for Economic Cooperation and Development (OECD)
(OECD)
• The OECD is a group of governments that work together to promote economic growth and world trade.
• Most OECD members are considered developed countries because they have high incomes and a high Human Development Index (HDI).
• It started in 1961.
• The main office is in Paris, France.
• As of January 2023, 38 countries are part of the OECD.
The Convention on the Organisation for Economic Cooperation and Development was first signed by 20 countries on December 14, 1960. Since then, 18 different countries have joined the Organisation.
Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United States make up the 38 Member Countries.
• India is not a member, but it is a very important business partner.
