JOHANNESBURG, SOUTH AFRICA— Long-running tensions between major international lenders and China were on display at a meeting in China's Anhui province as participants sought to reach an agreement on the future direction of some of the world's most indebted countries, many of which All in Africa.

Representatives from the IMF, World Bank, and China's Ministry of Finance attended; the meeting discussed debt restructuring in low-income countries, which the IMF says 60 percent are at or near debt woes.

Relations between the IMF and China, the world's largest bilateral creditor, have not been warm, Harry Verhoeven, a senior research scholar at Columbia University in the US, told VOA.

He said, "In recent years, the IMF has come under intense pressure from its most important shareholders, the United States, and European countries; build-up of debt levels” or force China to cancel some of its debts to Beijing.

"However, on the other hand, the IMF has also suffered a crisis of its legitimacy and is seen as prioritizing the interests and concerns of the West," he added. "In recent decades, a growing number of developing countries have tried to turn their backs on the IMF and have expressed deep distrust of its advice and conditions."

Analysts said African countries hoped the outcome of the meeting would be A combination of debt restructuring and forgiveness, along with more predictability and assurance, allowing them to still have access to fresh capital.

“The balance sheets of many African countries have been shattered and they are technically insolvent,” said Aly-Khan Satchu, a Kenyan economist.

Conciliatory tone

Both Beijing and the IMF's post-meeting press releases struck an upbeat tone.

IMF Managing Director Kristalina Georgieva said she had a "productive exchange" with her Chinese counterparts on how to speed up debt relief to prevent "triggering a global debt crisis".

Georgieva said China could play an "active role" in helping to speed up work on the Common Framework, a plan announced two years ago by the Group of 20 nations to Creditors participate and share the burden equitably to help countries deeply in debt.

So far, only Ethiopia, Chad and Zambia have requested debt relief under the Common Framework.

Ethiopia has been reeling from a civil war, so its debt restructuring has been delayed, according to Reuters. Chad has completed the debt settlement process, although the agreement has been criticized for failing to reduce Chad's overall debt.

"We need to use the momentum of the Chad debt processing agreement to expedite and finalize the debt processing of Zambia and Sri Lanka so that the IMF and MDBs can pay," Georgieva said.

2020, Zambia as COVID -19 first African country to default on loans in the pandemic era. In July, official creditors led by China agreed to provide debt relief. The move was welcomed by the IMF, but the process has been slow. Zambia's finance minister recently told Reuters he hoped Zambia would be able to complete its debt restructuring by the first quarter of 2023.

Meanwhile, Sri Lanka, which was hit by a crisis this year with a sovereign debt default, is not eligible for debt relief under the common framework; it is a middle-income country. However, it has begun debt restructuring talks, with its creditors China, India, and Japan playing a key role in the outcome.

China's Response

China has often been criticized, notably by U.S. Treasury Secretary Janet Yellen, for not participating adequately in international efforts to alleviate developing countries' debt burdens, or for delaying such efforts.

However, after last week's meeting, Chinese Premier Li Keqiang said, "China is willing to continue to strengthen macro policy coordination with all parties including the IMF to address global challenges such as debt and climate change...China is willing to fully implement the G20 Debt Suspension Initiative, to engage with relevant members and develop a fair and reasonable debt restructuring plan."

"As expected, China and the IMF have made many positive voices on China's role in completing the debt restructuring of Sri Lanka and Zambia , because both the IMF managing director and the leadership in Beijing need to recognize each other's efforts and legitimacy," Verhoeven said.

However, he also noted that "China has not fully supported the IMF-led common framework for debt management," which is what the IMF had hoped for.

Verhoeven noted that the IMF communiqué after the Anhui meeting referred to "recognition that the framework must become more practical and predictable, which translated in Beijing into an acknowledgment that China should not The accumulation of debt in local emerging economies has been particularly vilified.” The

West often accuses China of practicing “debt-trap diplomacy”—deliberately extending loans to countries it knows will not be able to repay, thereby increasing its political influence; It has been largely refuted by the academic community.

Just this week, China's ambassador to the United States, Qin Gang, cited a report by the British charity Debt Justice. The report shows that African countries actually owe three times as much to Western private lenders as they owe to China.

China has often argued that multilateral development banks should also participate in debt restructuring.

Difficult road ahead

World Bank President David Malpass, who was also at the Anhui meeting and took a more confrontational line than Georgieva, said: "In our meeting, We discussed in detail the deepening debt crisis in the world's poorest countries and China's role and responsibility in proposing and implementing solutions."

He said that Zambia's debt restructuring negotiations urgently need to make faster progress, "China's position Change is critical to this effort."

He also urged China to be transparent in loan contracts to help investors make informed decisions. Kenyan economist Sechu doesn't think the meeting ended up achieving much.

"China clearly prefers to maintain a degree of autonomy in all discussions with debtor countries, and I suspect that this visit is an attempt to agree on some kind of operating model between the IMF and China; as the IMF has tried before Some clumsy coercion to no avail," he said.

"In the geo-economic context, it is clear that China's appetite for lending to Africa has been sated and that the US and multilateral organizations will need to step in to fill the void. ... The challenge for the US and the IMF is  … .A lot of this new money will be recycled back to China to repay Chinese loans," Sechu said.