Daily Management Review

China and private creditors must ease debt of poor countries - IMF


Private creditors and China should fully participate in the program to ease the burden on poor countries.

Mstyslav Chernov
Mstyslav Chernov
Such an opinion was expressed by the director-coordinator of the International Monetary Fund (IMF) Kristalina Georgieva.

“Private creditors were not included in the resettlement program at the expense of servicing the poor countries. <...> Only three of the 44 countries that have the right to participate [in this program], tried to contact private creditors,” she said at a video conference during the autumn session of the governing bodies of the IMF and the World Bank.

According to Georgieva, only a handful of official credit organizations in China have accepted participation in this program. “What we also hear from China is a confession that it is a relatively new creditor, but it is a very large creditor. It should mature in its internal market from the point of view of appeals with its own creditors, coordination between them,” she added.

At the same time, the IMF considers that the active participation of China and private creditors in the program to ease the burden on the poor will become a "key to its success" and a potential basis for restructuring. It also called on countries with emerging markets to stimulate their economies on the basis of the release of cheap debt obligations.

The head of the IMF instructed on the need to adopt “urgent measures to help countries with low incomes to cope with the heavy burden of debt.” She also marked significant progress in the framework of the Group of Twenty (G20) moratorium on the payment of debts to the poorest countries of the world due to the new coronavirus pandemic.

source: imf.org