China now holds 63% of poor countries’ debt to G-20 members

(Ecofin Agency) – According to the World Bank, China holds 63% of the combined debt owed to G-20 member countries against 45% in 2013. This share has increased at the same time as the amount of external debt of poor countries eligible for the G-20 moratorium, which reached $ 744 billion in 2019.

China now holds 63% of the combined claims of the G-20 member countries. These are the figures revealed this week by the World Bank on the occasion of the publication of its new report on international debt statistics (IDS).

According to the institution, this largely dominant share has been steadily increasing for several years. In 2013, it was only 45%; which was already considered at the time to be a fairly high standard for a country that still considers itself to be middle-income nations.

This growing share coincides with an increase in the debt of poor countries, says the IDS report. Thus, the total external debt of countries eligible for the relief initiative adopted in April 2020 by the G-20 countries (DSSI) increased by 9.5% compared to the previous year. It reached a record $ 744 billion in 2019, and has grown twice as fast as that of other low- and middle-income countries.

« The debt stock of DSSI-eligible countries to official bilateral creditors, composed mainly of G-20 countries, reached $ 178 billion in 2019 and represented 17% of long-term net debt flows of low-income countries. and middle income The World Bank said in a statement.

The report comes in a particular context marked by the coronavirus which has pushed poor countries to demand a mechanism to ease their debt to the richest countries. If they have granted through the G-20 a moratorium on the repayment of the debt owed to them (extended by six months this week), some leaders continue to consider this measure insufficient, demanding the cancellation of the debt .

For David Malpass, President of the World Bank Group, “ Achieving sustainable long-term debt levels will depend on a large-scale change in the global approach to debt and investment transparency ».

And to add: ” the time has come for a much more comprehensive approach to tackling the debt crisis facing people in the poorest countries – an approach that involves the suspension of debt service as well as greater efforts. broad such as reduction of outstanding debt and faster debt restructuring, based on greater transparency ».

Moutiou Adjibi Nourou