SINGAPORE — Finance leaders from around the world have warned that an unprecedented US debt default would seriously threaten the global economy, with Chairman of the International Monetary and Financial Committee Tharman Shanmugaratnam saying the persistent uncertainty in the US financial sector was a “clear negative”.

“Private investment hinges on confidence and if you don’t get clear resolution of the US fiscal deficit and the debt issue, it’s going to be hard to see how that confidence is going to come back anywhere. So it’s a critical issue for all of us,” said Mr Tharman, who is also Singapore’s Deputy Prime Minister and Finance Minister, at the International Monetary Fund governing panel meeting in Washington.

He added that ensuring private investment grows strongly is critical in this next phase of recovery.

While in Washington, Mr Tharman will also receive the Finance Minister of the Year award handed out by Euromoney magazine.

The global banking and finance publication said the award recognises Mr Tharman’s role in shifting Singapore’s economic growth model from one dependent on a working population to a steadier platform of increasing productivity. CHANNEL NEWASASIA