Kristalina Georgieva, managing director of the International Monetary Fund (left), Ajay Banga, president of the World Bank Group (center) and Mohammed Al-Jadaan, Saudi Arabia’s finance minister, during a panel session at the annual meetings of the International Monetary Fund and World Bank in Marrakesh, Morocco, on Thursday, Oct. 12, 2023.
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Saudi Arabia has defended China from criticism that its infrastructure investments have saddled African and other low income countries with crippling debt, cultivating a reliance on Beijing.
“Maybe it’s time to set the record straight,” Finance Minister Mohammed al-Jadaan said Thursday at the World Bank and International Monetary Fund joint conference in Marrakesh, Morocco.
“China stepped up when people actually shied away from Africa. China built infrastructure that they cannot carry with them to China, it will actually be in Africa. China took the risks, when people didn’t want to take the risks,” he said at a panel discussion on debt reform priorities.
“Instead of actually poking China, I think we should establish here that they did what they needed to do for their own interest, but also to actually help other nations,” al-Jadaan said.
He was speaking on a Marrakesh panel discussion, which included the heads of both the World Bank and International Monetary Fund, as well as Zambia’s Minister of Finance and National Planning, Situmbeko Musokotwane. China was not represented on that panel.
Sovereign debt reforms
China is the world’s largest sovereign debt creditor, partly the result of its largesse stemming from infrastructure projects on its signature Belt and Road Initiative in the last decade. Critics say the massive project forces developing countries to take on high debt while benefiting Chinese firms that are often state owned.
“They are taking a risk — a very high risk — which now they are just collecting on that risk,” al-Jadaan said referring to China. “We should just work with them, we should just show them love, work with them and try to make the common framework work.”
“Instead of just antagonizing them, and actually damaging the low income countries which need their help, we should just show China as much love as we can, for the sake of the low-income countries, which need to find solutions for their debt,” he added.
U.S. officials are among those who have criticized China for being unwilling to accept losses on loans unless private-sector creditors and multilateral development banks do the same. Consequently, Beijing has sometimes engaged in direct talks with debtor countries.
Following a recent deal for Zambia to finance its debt to international creditors, China’s foreign ministry said Tuesday the Export-Import Bank of China had reached a tentative agreement with Sri Lanka on its debt servicing.
“The Sri Lankan authorities hope that this landmark achievement will provide an anchor to their ongoing engagement with the Official Creditor Committee and commercial creditors, including the bondholders,” Sri Lanka’s finance ministry said in a subsequent statement.
“It should also facilitate approval by the IMF Executive Board of the first review of the IMF-supported program in the coming weeks, allowing for the next tranche of IMF financing of about US$334 million to be disbursed,” the ministry added.
