Developing country debts: G7 attacks Beijing
The Chinese are not participating in multilateral talks on debt relief for the poorest nations. China also wants the World Bank and International Monetary Fund to agree to a cut. This year developing states have to repay foreign debts amounting to billion, 40% of which is owed to Beijing.
Beijing (AsiaNews) - G7 advanced economies say China is the main obstacle in multilateral efforts to restructure the foreign debt of developing countries, burdened by the effects of the Covid-19 pandemic, the Russian invasion of Ukraine and the related energy crisis.
US Treasury Secretary Janet Yellen said this yesterday during a meeting with some of her African counterparts. Yellen explained that she discussed the need to bring Beijing to the negotiating table. The German Finance Minister and his Spanish colleague expressed the same disappointment.
The Chinese responded that they will not participate in debt relief schemes if the World Bank and the International Monetary Fund (IMF) do not agree to cuts in what they are owed.
In 2020, the G20 launched a mechanism to involve China and India in restructuring the debts of poorer nations, which was immediately joined by the Paris Club, which brings together Western economies, the IMF and several private creditors.
This year alone, developing countries have to repay billion in foreign debts: 40% is owed to China, reports the World Bank. Beijing is the world's leading lender to low-income states, especially in Africa, Central Asia, South-East Asia and the Pacific.
Most of these are nations that have received funds under the banner of the Belt and Road Initiative, Xi Jinping's mega-project to increase China's geopolitical clout with infrastructure investments around the world.
In absolute terms, by the end of 2020 the countries most indebted to Beijing were Pakistan (77.3 billion dollars), Angola (36.3 billion), Ethiopia (7.9 billion), Kenya (7.4 billion) and Sri Lanka (6.8 billion).
In terms of the percentage of GDP they are Djibouti (43%), Angola (41%), Maldives (38%), Laos (30%) and Democratic Republic of Congo (29%).
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