China should cancel debt of poor countries hit by Coronavirus, demands

Washington/Beijing: The World Bank has demanded that China, known as the largest lender in the world, should waive the loans given to the under-developed countries against the background of the Coronavirus pandemic. All the member countries had concurred on this during the G20 meeting held in April. But China started dilly-dallying regarding loan waiver, saying that the Chinese banks under government control were private financial institutions. Therefore, some member countries, along with the World Bank, seem to have taken an aggressive stand against China.

Economies of most of the countries in the world have taken a major hit due to the Coronavirus pandemic. Leading countries of the world announced relief packages to bail the economy out of the Coronavirus crisis. But the condition of the countries dependent on the richer countries is perilous. Against this background, the G20 countries approved a plan named Debt Service Suspension Initiative (DSDI). Under the DSDI, whatever debt-related payments were due between May to December 2020 were to be restructured. These included facilities like loan waiver and moratorium period for the interest payments. 77 under-developed countries from Asia and Africa were included in the list.

These 77 countries are expected to repay USD 12 billion during this period, and 70% of these loans are linked with China. David Malpass, President of the World Bank, demanded that therefore, China should take the initiative and waive the loans. He also accused that the Chinese banks who have given these loans are not participating in the DSDI. The Chinese government has used various banks to provide these loans and is trying to show some of these banks as private financial institutions. Therefore, the World Bank and other leading countries have expressed displeasure. These also include countries from the G7 group.

Accusations that China has entangled many countries in its debt trap under the pretext of Belt and Road Initiative scheme are rife on the international level. At the same time, it is believed that the Coronavirus pandemic has been started by China. There is tremendous discontent brewing on the global level against China. It is being claimed that if China takes a stand to recover the loans from the under-developed countries from Asia and Africa despite the crisis, the anti-China sentiment will intensify, and the Chines image will also be maligned further.