Team News Riveting
The statement of World Bank President David Malpass had put China under pressure to cancel its huge debt to coronavirus-hit poor countries under the Group of 20 Debt Service Suspension Initiative (DSSI).
Malpass on Monday called on the world’s largest creditor, China, to cancel debt to coronavirus-hit poor countries, blaming Beijing’s well capitalised official lenders of not fully participating in the DSSI. An added factor in the current wave of debt is the rapid growth of new official lenders, especially several of China’s well-capitalised creditors, Malpass said.
The finance ministers of G20 agreed for a “time-bound suspension of debt service payments” to the 77 poorest countries in the world during online spring meetings of the International Monetary Fund (IMF) and the World Bank on April 15 in view of the grim situation faced by these countries due to the coronavirus pandemic.
Under this DSSI, a payment of an estimated USD 12 billion due to be paid between May 1 and the end of 2020 has been rescheduled.
According to a write up in China’s state-run CGTN, over 100 low- and middle-income countries will still have to pay a total of USD 130 billion in debt service in 2020.
In addition, 43 countries have received about USD five billion from the DSSI to fund social, health and economic measures to respond to the pandemic.
China is the biggest bilateral lender for most emerging economies, especially lending to hundreds of projects under its Belt and Road Initiative (BRI).
