Reviews | The G-20 has done little for poor nations. They need debt relief, especially from China.
The Trump administration balked at an ambitious idea, initially proposed by France: to grant debtor countries hundreds of billions of dollars in International Monetary Fund resources called Special Drawing Rights, as was done in response to the financial crisis. of 2008. Yet the United States and other Western countries alone could not solve a problem which, unlike previous debt crises, bears the label “Made in China”. The People’s Republic recycled its huge export earnings and gained political influence, through aggressive project loans across Asia and Africa. And it did so without the transparency that Western banks, multilateral institutions, and governments usually practice. According to research by economist Carmen Reinhart of Harvard, and Sebastian Horn and Christoph Trebesch of the Kiel German Institute for the World Economy, China has lent $ 400 billion to 106 developing and emerging countries until 2017, two times more than what was recorded in the debt burden data published by multilateral organizations and rating agencies. Additionally, China’s credit is a public-private hybrid, granted on non-concessional terms from the private sector, but through government-controlled banks.