China consolidates its position as the main creditor of poor countries

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China consolidates its position as the main creditor of poor countries




The Chinese national flag and the flag of Hong Kong hoisted outside the Court of Appeal and Bank of China, on July 16, 2020 in Hong Kong


© Anthony WALLACE
The Chinese national flag and the flag of Hong Kong hoisted outside the Court of Appeal and Bank of China, on July 16, 2020 in Hong Kong


China has largely consolidated its position as the main creditor of poor countries in recent years, well ahead of Japan, the World Bank (WB) reported on Monday, regretting that the country has not yet participated in the debt moratorium. .



World Bank President David Malpass on February 10, 2020


© Brendan Smialowski
World Bank President David Malpass on February 10, 2020


The Asian giant’s share of total liabilities owed to G20 countries by other nations increased from 45% in 2013 to 63% at the end of 2019, the World Bank said in a statement.

“During the same period, the share of Japan, the second largest creditor in the G20, was virtually unchanged at 15%,” he added.

In April, the G20 launched the Debt Service Suspension Initiative (DSSI) to relieve the most vulnerable countries hit by the covid-19 pandemic. This came into force on May 1, for a year.

Since then, the International Monetary Fund, the World Bank and the G7 have called for it to be extended, lamenting the lack of participation by private sector creditors, which weakens the initiative.

World Bank President David Malpass underscored his “frustration” during a conference call Monday. In addition, he regretted the “partial participation” of official bilateral creditors.

“Some of the biggest official bilateral creditors, including some from China, are not yet participating in the moratorium,” he said.

This initiative benefits more than 70 poor countries, including Honduras, Haiti and Nicaragua in Latin America.

– Debt on the rise –

The total debt of countries eligible for ISSD rose 9.5% in 2019, before the pandemic, to $ 744 billion, a record high. On this amount, 178,000 million correspond to bilateral debt, mostly with G20 members.

At the end of September, the G7 finance ministers said they were in favor of extending the moratorium, but called for a fair share among all creditors.

They also “deeply” regretted the measures taken by some countries to avoid participating in this initiative, for example by classifying their public institutions as commercial lenders.

Without naming him, they implicitly targeted China, whose Development Bank is regarded by Beijing as a commercial bank, allowing it to not be included in a debt moratorium initiative.

According to the G7, the DSSI has already allowed 43 countries to defer $ 5 billion in official debt service payments to free up money to respond to the covid-19 pandemic.

The new coronavirus pandemic has caused at least 1,077,849 deaths in the world since the WHO office in China reported the appearance of the disease in December, according to a balance established by AFP this Monday at 11:00 GMT based on to official sources.

Since the beginning of the epidemic, more than 37,575,650 people have contracted the disease. Of these, at least 25,963,400 were recovered, according to authorities.

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