(Washington) US Treasury Secretary Janet Yellen on Friday accused China, the main creditor of many countries, of obstructing international efforts to provide debt relief to the poorest countries, particularly those on the African continent.
Posted yesterday at 6:00 p.m.
“The obstacle to greater progress is a major creditor country, namely China,” Joe Biden’s Secretary of Economy and Finance said Friday during a press conference at the headquarters of the International Monetary Fund. (IMF), in Washington.
“So there’s been a lot of discussion about what we can do to bring China to the table and help to resolve these issues more effectively,” she said, as the fall meetings of the IMF and of the World Bank, which also saw the G7 and G20 Finances meet, are coming to an end.
The IMF and the World Bank regularly call on China, the world’s largest creditor, to engage in the restructuring of the debt of poor and developing countries through the common negotiation framework set up by the G20.
“Very few countries” ask that their debt be treated within the common framework of the IMF, had underlined the minister earlier in the day, during a meeting with her counterparts from the countries of the euro zone. Among those who did, “China is a big factor in why it doesn’t work” and Beijing “isn’t participating constructively,” she said.
The economic damage caused by the COVID-19 pandemic has led many countries to have to borrow again, with situations of over-indebtedness, reinforced by the rise in interest rates which should make it possible to curb inflation.
The situation in African countries and in other developing countries “is extremely worrying”, underlined the Secretary of the Treasury.
“Debt problems are becoming more and more acute for African countries,” warned Mr.me Yellen, who recognized “the importance of making progress towards having a better and more effective framework for resolving over-indebtedness”.
The total stock of official Chinese loans is valued at between $500 billion and $1 trillion, concentrated in low- and middle-income countries, and “no less than 44 countries now owe debt equivalent to more than 10% of their GDP to Chinese lenders, “said an adviser to Mr.me Yelen.