President of the World Bank David Malpass has accused China of delaying the debt restructuring process for Zambia.
And Mr. Malpaas has called for a new process for restructuring debt burdens for developing nations amid concerns about a lack of transparency over how much they owe to China.
Mr. Malpass said on Bloomberg Television’s Surveillance Tuesday that it is important for China to get on board for Zambia’s debt talks to move forward.
He said it is in China’s interests to have an improved system, given the prominence of their lending, and noted that Beijing is interested in participating.
“But the system has been one where — that has allowed transparency to go down and down.”
“In many cases, there are non-disclosure clauses in the debt contracts that leave it unclear” that payments are being made “often times to China,” Mr. Malpass said.
“The devil is in the details.”
Mr. Malpass noted that China remains outside of the Paris Club, the main institution where debt-restructuring talks occur.
The Group of 20 is making “some progress” in trying to broaden that out, he said.
G-20 finance chiefs were scheduled to meet later Wednesday.
Among the issues Malpass listed was some countries delaying addressing debt problems until a point of crisis, such as — in the case of Sri Lanka — the need to pay for food.
There’s also an imbalance between what the poorest countries are expected to pay — some $35 billion of debt service this year alone — versus the fresh foreign-aid flows that are coming in, Malpass said.
Among the issues discussed at the Wednesday IMFC session was a call for China to convene a creditors’ committee for Zambia.
“That would be a very helpful step” given how Zambia stopped paying creditors about a year ago, but lacks any pathway to debt resolution now, Mr. Malpass said.
“The world needs to have a resolution process for debt that’s more robust than we have right now and starts earlier,.”
“There really needs to be a change,” he said. “The world was set up under the old debt composition, where China wasn’t a big player,” he said.
The International Monetary and Financial Committee, the main steering panel of the IMF’s member countries, “heavily” discussed the subject of debt resolution at a session on Wednesday morning, Mr. Malpass said.
The meeting is one of a slew that are part of the spring meetings of the World Bank and International Monetary Fund this week in Washington.
“It’s not all transparent as far as what the amounts are” that are owed to China, Mr. Malpass said.
As far as official, government-to-government lending goes — a category that excludes categories such as private-sector bank credit — China now makes up 65% of the total, Mr. Malpass said.
The World Bank chief said “we’re working to avoid” the circumstance where assistance being sent to developing nations simply gets onpassed to China in the form of debt servicing.
Unjust trade structures: Lastly, another major factor that causes and encourages poverty in Africa is unjust global trades. According to SOS Children’s Villages, some of the world’s richest countries are known to create unjust trade structures by “shielding their markets with high agricultural tariffs and heavily subsidising their own agriculture.” This slows down African country’s ability to develop their agriculture sectors, a situation that inevitably encourages poverty.
#1 Let him address this instead of blaming China.
IMF and the World Bank are no different than the Chinese, only thing that separates the West is how they handle corruption…in the West its called “Consultancy Fees”
The West will keep Africa poor yet we have the most wealth in the world….shame on all Africans for allowing this
LETS BLAME THE WHITE MAN AGAIN KIKIKI
The point to note is that IMF can’t give Chambia money to service Chinese debts
1. This is not surprising. HH has taken a very childish stance towards China, a nation we owe the largest debt. He has either invited or visited western diplomats for sit-downs. And not surprising that Exim Bank has frozen the funds assigned to complete the Kafue Gorge Electric Power Station.
HH’s political apprentice is alarming and petrifying for a person who was in opposition for more than 15 years. Then again just look at the quality of our Minister of Foreign Affairs. Its pathetic.
Upnd think the whlte man is supporting them. Trust your imperialist at your own peril
2. One of the things that RB told HH in their meetings was that Do not isolate China, we need them. You will regret it in the end. RB was a man who had vast experience in managing diplomatic & International Relations.
These same nations HH is pleasing; to isolate China, such as USA and UK, are building Infrastructure Development Projects using Chinese Money. USA owes China $11 Trillion. UK owes China in excess of £22 Billion.
He has to discuss with Chinese and all official creditors and achieve 70% participation in the debt that is to be structured I Donot think Chinese are a problem the issue will remain with IMF board resolutions Black Rock is not also a problem Settling quickly issues of debt to be restructured and terms could have been achieved by now Discussion s and conclusions with the committee of bond holders and achieve some level of equity is what is important setting out the minimum budgetary surpluses towards repayments Zambias real options are good and brighter for all bond holders and Investors to buy in it’s soverigns for long-term to come it’s a matter of discussions
You can buy off the Chinese debt especially when you look at the structure and composition of the official creditors if you look at it seriously also
It’s not a foregone issue
There is no country in the earth that has prospered with Chinese debt………or help as you call it.
Countries like Singapore, Malaysia refused the Chinese terms of debt or help as Africans call it…………
Countries like the USA , UK and other western nations have leverage over Chinese influence and debt……….simply by threatening to isolate China’s imports to their markets if China does not play by their terms……….
Countries like zambia are in danger of being swallowed by China……….
The Zambian goverment is right to make a stand against this imperialism by China……..
Trade and investment with China must be a 2 way street…………
I think IMF Christina are also supportive You could see how yesterday with Rice,the conversations were on reforming and clearing to restructing the G20 issues affecting quick discussions on procedures and restructuring time-frames that involves both creditors and debtors Pursing various options in government financing the budgetary GAP before the restructuring with also local revenues mobilization will help to achieve a soft landing Take advantage also in the new $650B financing available but also in tend to wonder why other countries not so better achieve closure and funding sums bigger than Zambia with IMF and word Bank including the Chinese for sectors of value
Spaka 12
1. The UK borrowed £3 Billion from China when David Cameron was UK Prime Minister. The money is being used to fund the Nuclear Power Station. Not only did they provide the money, but they also designed the Nuclear Generator for the CGN Bradwell Plant in UK, which the UK Regulator had approved with flying colours.
Spaka! Would you call that China helping to a nation to “prosper” such as Britain or taking the nation back to Stone Age?
I can list detailed 500 projects that China has funded to bring development in US, Europe, South America, Europe & Africa, including Zambia.
Spaka 12
2. China has created a Global World Bank ( AIIB) Asian Infrastructure Investment Bank, in competition with the US Based World Bank and IMF. The US Government tried to diminish the Bank but failed. Then the USA tried to discourage other nations, from joining but it backfired and suffered a humiliating defeat. The UK, German, Australia, South Korea have joined up, including 65 other nations up to date.
Now this is the competition that World Bank or IMF does not want from China. Because it knows China is sitting at huge wealth and it can dictate the discourse globally. So far money from AIIB is developing prospering nations all over the world.
Kikikikiki and you think Stanley Kakubo wasn’t sent by HH to meet the Chinese ambassador in the parking lot and walk away with a gift….pwipwipwi vishupu
In many cases, there are non-disclosure clauses in the debt contracts that leave it unclear” that payments are being made “often times to China,” Mr. Malpass said. Has the IMF themselves disclosed their loan TERMS to us Zambians. NAY NAY. Mr. Malpass check yourself and the conditions you attch to your LOANS before attacking CHINA. ITS ON RECORD XI JINPING called on all AFRICAN HEADS OF STATES not long ago an gave THEM more 50 billion Dollars for grabs with minimal conditionalities. NO LEADER SAID NO TO IT
#14 INDEPENDENT OBSERVER
As I said , the west has leverage over Chinese debt by threatening to impose sanctions on Chinese goods to their markets……….
The UK first plans for nuclear power projects was scrapped……..
The The UK is now using French technology and knowhow for its nuclear power plants…………
Name a developing country that has prospered through Chinese debt ?????
@18 name a developing nation that has prospered from western debt/ aid? Ask Dambwisa