Why is China being blamed for the stalled G20 debt relief plan for distressed countries?
- The Common Framework was meant to help out low-income nations battered by the coronavirus pandemic
- A year on and it has failed to benefit any potential recipients
More than a year has passed since the G20 launched a debt restructure plan to help potential defaulters but developing countries have yet to see the benefits – something the US and multilateral groups are blaming on China.
Under the scheme, participating countries were to agree to restructure debt with bilateral lenders and the International Monetary Fund (IMF). The nations were then supposed to seek similar debt treatment from private-sector creditors.
There were hopes of progress in the Indonesian capital Jakarta earlier this month, when G20 finance ministers and central bank governors met to consider IMF and World Bank proposals for immediate debt service suspension for countries seeking debt restructuring.
But the meeting failed to endorse the proposals and the talks ended without a solution to the debt crisis. One major sticking point was that China reportedly did not want outright haircuts on debt.