David Malpass, the current president of the world Bank group, in remarks to the meeting of Finance ministers and central bank governors of the G20, he told the July 18, 2020, was in a manner hushed very clearly put in play China because of his attitude in the search for a solution for countries that are highly indebted. We translate a few key passages :
To maximize the indispensable support to the countries eligible to the initiative for suspension of the service of the debt (ISSD), all official bilateral creditors, including banks, national policies, must be the implementation of the ISSD in a transparent manner. For example, the full participation of the development Bank of china as a creditor official bilateral is important to ensure that the initiative works. The transparency of the debt, including the transparency of the debt restructurings that we talked about earlier, is of course the starting point of endings more balanced in terms of debt.
the creditors of The Paris Club see the interest, but a large part of the credit official bilateral comes from outside of the Paris Club, the understanding of China. For the ISSD to be fully effective, it is necessary that there is a set of common minimum information on the restructuring of the debt. This will prevent the rescheduling secrets that are underway in some countries, such as Angola and Laos, often with grace periods and for conditions not disclosed.
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Diving in the claims chinese
Thierry Pairault puts the finger on important changes taking place on the side of the world Bank. © DR
The reference to Angola and Laos is not neutral and is very specific to China. Angola, who is debtor to a third-party claims chinese of Africa, must face in 2020 to service official bilateral debt, of which 90 % are due to China. The total of what is owed to China amounted to nearly 60 % of the total service of the debt. Laos is facing in the same year 2020 to a service official bilateral debt, of which 70 % are due to China.
The declarations of David Malpass are to be put in relation with another event, the appointment of Carmen Reinhart as chief economist of the world Bank, a position that Lin Yifu had held from 2008 to 2012, at a time when China was seen as a major example that all developing countries should emulate. Today, the arrival of Carmen Reinhart would post it as a new era in which China would no longer be such a beautiful role.
In June 2019, which is six to nine months before does not trigger the current health crisis and cannot be launched, calls for the cancellation of the debts of the poorest countries, Carmen Reinhart published with two co-authors, Sebastian Horn, and Christoph Trebesch, a study on loans from China to foreign countries that the initial version was corrected in April of this year. Here is the presentation given by the authors :
” The role of China in global finance is poorly understood compared to its status as pre-eminent in the world trade. This research note examines the size, characteristics and determinants of exports in China’s capital by building a new database of 5,000 loans and grants to 152 countries, from 1949 to 2017. We find that 50 % of loans from China to developing countries are not reported to the IMF or the world Bank. These “debts hidden” distort the policy monitoring, risk assessment and analysis of debt sustainability. Given that the chinese loans to foreign countries are almost entirely public, that is to say, controlled by the State, the usual factors of “push” and “pull” of cross-border flows in private shall not apply in the same way. “
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paradigm Shift
Even if Deborah Bräutigam of the China Africa Research Initiative at Johns Hopkins, has been able to discuss some methodological aspects of this work in an article published on his blog (Is China Hiding stis Overseas Lending ? Horn, Reinhart and Trebesch’s “Hidden Loans” and Hidden Data), what interests us here is not the accuracy of the content, but first and foremost, the message that passes the study by Carmen Reinhart to the extent where it will serve as the emblem of his mission to the world Bank – as was, in its time, the book of Lin Yifu on the miracle of the chinese. The name at the head of the world Bank in the economy would necessarily have a political meaning very strong and, indirectly, introduces a charge in respect of China.
Because here it is not a matter of discuss the interpretation of the official figures, as I could myself do, but to put in question a funding system is opaque, which could raise debt of the poorest countries. In fine, the message could be to denounce, without really saying it, a corporate hegemony that would have taken the appearances patelines of the new silk roads. Indeed, Carmen Reinhart and his co-authors note that, “the two most important donors overseas chinese are, by far, the two chinese State banks” : the Bank of china export-import Bank and the chinese development. Traditionally, these two institutions were focused on developing countries and middle-income countries, but, in the past five years, they are increasingly active in the advanced countries.
This vision is confirmed by the interview that the president of the Exim Bank of China, Zhang Qingsong, has given to the string of chinese television CCTV on April 23, 2020. He said that 1,800 projects along the new silk road would benefit from financial assistance from his bank which would have contributed to a trillion renminbi – almost $ 150 billion. Zhang Qingsong insisted on the role of these financial relations, of the loans-sovereign debt in order to emphasize that they were the internationalization of the renminbi and the affirmation of China as a great power. Therefore, it is clearly a policy that is assumed to influence and not a simple business strategy.
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* Director of research emeritus at the CNRS – École des hautes études en sciences sociales and the Centre for studies on modern and contemporary China (UMR 8173).
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