Uh oh, the IMF feels scared again about BRICS...
“My view is that we have to drag them — maybe that’s an impolite word — we need to walk together,” IMF Managing Director Kristalina Georgieva said earlier this month. “Because if we don’t, there will be catastrophe for many, many countries.”
The IMF and World Bank say taking losses on their loans would rip up the traditional playbook of dealing with sovereign crises that accords them special treatment because, unlike Chinese banks, they already finance at low rates to help distressed countries get back on their feet. The Chinese foreign ministry noted, however, that the two multilateral lenders have made an exception to the rules in the past.
In effect, China had jumped to the front of the line to get paid without other lenders knowing.
:rage-cry:
Probably because their loans don't have onerous terms in social spending, which means that countries want to pay them back first so they can take out again from them.
Sucks to have competition doesn't it IMF? Boohoo my monopoly.
My great grandfather once had the monopoly on all the loans in China :deeper-sadness:
Oh the loans that they frequently forgive? Those loans? Yeah sure AP news. Totally credible source.
1/3rd of Pakistan's debt (mentioned in the article) belongs to entities dominated by the west (IMF, World Bank), 30% of it's debt is owned by private entities that have absolutely no interest in forgiving it and 19% is owned by China, collectively the west and private entities hold MORE debt than China does. The key aspect here is the nature of said debts, while China holds the largest bilateral debt with Pakistan, said debt is rooted on tangible infrastructure projects, in this regard, it's a debt that "pays off by itself" in a sense. Also, China has in its best interests keeping Pakistan stable, because they have invested millions in the China-Pakistan Economic Corridor to rely less on the Malacca Strait, so they're logically more than willing to either forgive huge chunks of this debt or even renegotiate. If anything, in the case of Pakistan, China is the least of their problems, I can't say the same of western debt owners... and I know that from experience.
So they either never did their research or they're doing this on purpose, I think we all know the answer. IMF loans go nowhere, they're imperialistic in nature, they're there to reestructure YOUR country, change laws, deregularization and so on. Even in the most basic way of thinking about it, China builds roads, bridges and schools, so scary huh? This article is pure projection, it irradiates orientalism and western moral supremacy.
God, please, burn the west, it's a wise choice.
I love this genre of poltical articles that literally just inverts reality, I mean just pure unmitigated bullshit presented without shame, cause why not, the author and the editor who let it thru know the anglo pigs who read this shit can't tell the difference
Tried to discuss that with my lib dad when he sent me this and he just 🤖
Yeah saw this article posted on collapse and though plenty of peeps calling it out there's also an amount calling anyone a tankie for arguing against it.
calling anyone a tankie for arguing against it.
Weird of them to compliment their opponents like this but ok.
Most unforgiving lender? Hasnt China literally forgiven debts?
I know, isn't it sickening? They should just hold entire countries economically hostage, assassinate their leaders, starve their people and tell them they can't breastfeed their kids, like the enlightened and forgiving west does.
https://www.news.com.au/finance/economy/china-forgives-debt-for-17-african-nations/news-story/28ab7f45440142634ff8efd0360b2fec
Has China forgiven loans besides these ones?
China argues it has offered relief in the form of extended loan maturities and emergency loans, and as the biggest contributor to a program to temporarily suspend interest payments during the coronavirus pandemic. It also says it has forgiven 23 no-interest loans to African countries, though AidData’s Parks said such loans are mostly from two decades ago and amount to less than 5% of the total it has lent.
I remember hearing about the Africa ones but did not read much about it
It also says it has forgiven 23 no-interest loans to African countries, though AidData’s Parks said such loans are mostly from two decades ago and amount to less than 5% of the total it has lent.
Holy shit, China was giving away no-interest loans to Africa 20 years ago? Damn, China was a lot poorer back then. This is real dedication to internationalism.
I believe they mean that the loans were issued two decades ago and were forgiven recently.
Yeah, that's what I meant. 2003 China giving out an interest free loan is a bigger deal than 2023 China since extreme poverty had not been eliminated yet and the average Chinese person was still much poorer than they are now.
Yeah, for some African nations and at least a few countries in Asia like Vietnam. I want to say also Cambodia and Laos, but I'm not sure.
I couldn't find anything foy Vietnam or Laos, I only say forgiveness for the African countries mentioned
I could have sworn I saw it somewhere, but it's a nuisance to look this sort of thing up when the results are so saturated with "debt trap" articles.
On top of that is the recent discovery that borrowers have been required to put cash in hidden escrow accounts that push China to the front of the line of creditors to be paid.
But China didn’t play by those rules. It refused at first to even join in multinational talks, negotiating separately with Zambia and insisting on confidentiality that barred the country from telling non-Chinese lenders the terms of the loans and whether China had devised a way of muscling to the front of the repayment line.
The Chinese Ministry of Foreign Affairs, in a statement to the AP, disputed the notion that China is an unforgiving lender and echoed previous statements putting the blame on the Federal Reserve. It said that if it is to accede to IMF and World Bank demands to forgive a portion of its loans, so should those multilateral lenders, which it views as U.S. proxies.
Michael Hudson has been talking about China increasingly becoming reluctant to forgive loans since the country it forgives is probably going to turn around to pay the IMF and World Bank. Article kind of tracks.
“We call on these institutions to actively participate in relevant actions in accordance with the principle of ‘joint action, fair burden’ and make greater contributions to help developing countries tide over the difficulties,” the ministry statement said.
In high-level talks in Washington last month, China was considering dropping its demand that the IMF and World Bank forgive loans if the two lenders would make commitments to offer grants and other help to troubled countries, according to various news reports. But in the weeks since there has been no announcement and both lenders have expressed frustration with Beijing.
China: IMF forgive loans 😲
The IMF and World Bank say taking losses on their loans would rip up the traditional playbook of dealing with sovereign crises that accords them special treatment because, unlike Chinese banks, they already finance at low rates to help distressed countries get back on their feet. The Chinese foreign ministry noted, however, that the two multilateral lenders have made an exception to the rules in the past.
IMF: No cause bad, reasons 😲
Ashfaq Hassan, a former debt official at Pakistan’s Ministry of Finance, said his country’s debt burden is too heavy and time too short for the IMF and World Bank to hold out. He also called for concessions from private investment funds that lent to his country by purchasing bonds.
“Every stakeholder will have to take a haircut,” Hassan said.
I don't understand this part. What is the IMF and World Bank holding out for?
In effect, China had jumped to the front of the line to get paid without other lenders knowing.
“The other creditors are saying, ‘We’re not going to offer anything if China is, in effect, at the head of the repayment line,’” Parks said. “It leads to paralysis. Everyone is sizing each other up and saying, ‘Am I going to be a chump here?’”
Yes, this article sounds like the West is just mad that they might lose money on loans to poor countries cause China won't accept being paid after them.
Meanwhile, Beijing has taken on a new kind of hidden lending that has added to the confusion and distrust. Parks and others found that China’s central bank has effectively been lending tens of billions of dollars through what appear as ordinary foreign currency exchanges.
Foreign currency exchanges, called swaps, allow countries to essentially borrow more widely used currencies like the U.S. dollar to plug temporary shortages in foreign reserves. They are intended for liquidity purposes, not to build things, and last for only a few months.
Mongolia has taken out $1.8 billion annually in such swaps for years, an amount equivalent to 14% of its annual economic output. Pakistan has taken out nearly $3.6 billion annually for years and Laos $300 million .
Dedollarization cope.
http://www.chinatoday.com.cn/ctenglish/se/txt/2012-04/28/content_449847.htm
https://www.business-standard.com/article/international/pakistan-china-sign-mou-for-setting-up-yuan-clearing-arrangements-122110300465_1.html
Some poor countries struggling to repay China now find themselves stuck in a kind of loan limbo: China won’t budge in taking losses, and the IMF won’t offer low-interest loans if the money is just going to pay interest on Chinese debt.
China won't take a loss so we can go in there and start getting paid.
I think the real intent of this is to continue to put pressure on China to forgive loans, not because they want to help the indebted countries, or because they just want to paint China in a bad light for propaganda purposes, but because occasionally some opportunistic politicians within these countries will use any loan forgiveness from China in order to take out additional loans from IMF. In the event that occurs, this aids the US/EU/IMF/World Bank in that it is seen as a "drain" on China's ability to invest in these countries (limiting their soft power) while simultaneously giving them more leverage over these poor countries to extract rents. I think it ignores that China has been forgiving many of these loans anyway, and China has a genuine desire to help these countries develop and increase their productive capacity. The other benefit that the west worries about, that poorer countries will look to China for leadership and undermine "western" hegemony, has already occurred over the past decade. They are essentially late to the party. And as the fed continues to increase interest rates, the logic of borrowing from IMF will begin to falter to an even greater degree.
world’s biggest and most unforgiving government lender, China.
They've literally forgiven tons of loans. https://www.news.com.au/finance/economy/china-forgives-debt-for-17-african-nations/news-story/28ab7f45440142634ff8efd0360b2fec
Amid this confusion in 2020, a group of non-Chinese lenders refused desperate pleas from Zambia to suspend interest payments, even for a few months. That refusal added to the drain on Zambia’s foreign cash reserves, the stash of mostly U.S. dollars that it used to pay interest on loans and to buy major commodities like oil. By November 2020, with little reserves left, Zambia stopped paying the interest and defaulted, locking it out of future borrowing and setting off a vicious cycle of spending cuts and deepening poverty.
Look what you made me do!
