WASHINGTON World Bank President David Malpass told senior Chinese government officials that Beijing needs to do more to reduce debt burdens on developing economies.
In readouts of Malpass' meetings with Premier Li Keqiang, Finance Minister Liu Kun and People's Bank of China Governor Yi Gang, the World Bank said that the development bank leader asked officials to publish more data on debt instruments to help speed up restructurings for poor countries.
The World Bank said that President Malpass and Premier Li had a discussion on the burden of unsustainable debt levels in many developing countries. Malpass said that rising debt service payments were draining limited resources from debtor countries, reducing spending on health, education, infrastructure and climate priorities.
Malpass participated in meetings with Chinese officials and state banks in the eastern Chinese city of Huangshan, along with International Monetary Fund Managing Director Kristalina Georgieva, and leaders of other international institutions to discuss a range of macroeconomic issues.
Malpass was first confirmed as a part of the Reuters NEXT conference last week, which revealed that the world's poorest countries now have $62 billion in annual debt service, up 35 per cent from a year ago. The World Bank's annual debt statistics report released on Wednesday shows that it is equivalent to a tenth of their export income, the highest level since 2000.
The International Monetary Fund estimates that low-income countries would need nearly $500 billion in external funding by 2026, with some $57 billion in increased needs over 2022 and 2023 due to Russia's war in Ukraine.
Malpass asked Finance Minister Liu for China's leadership in addressing unsustainable debts and accelerating Zambia's debt restructuring process.
Zambia is trying to complete the restructuring of nearly $15 billion of external debt early next year, and is in active engagement with China, Zambia's finance minister Situmbeko Musokotwane told Reuters NEXT. The IMF has urged Zambia to strike a deal with its creditors as soon as possible.
Malpass and Liu also exchanged views on debt transparency, reporting and reconciliation, and comparability of treatment among official bilateral and private sector creditors in restructurings, according to the World Bank.