Chinese officials in Zambia had a direct answer this week when U.S. Treasury Secretary Janet Yellen referred to China as a “block” to debt restructuring in Africa. They said: “Get your own house in order.”
The biggest contribution the United States can make to the debt problems outside the country, according to the Chinese Embassy in Zambia, is to implement responsible monetary policies, deal with its own debt issue, and stop actively undermining other sovereign nations’ efforts to address their debt problems.
Republicans in the House of Representatives are putting the Biden administration and Democrats under pressure to reduce spending by threatening to abstain from voting on a new debt ceiling, which reflects money that has already been spent and is now owed by the government. The Biden administration has so far refused to engage in negotiations, betting that conservative Republicans will budge in response to pressure from industry, investors, and moderates.
The U.S. national debt is currently at $31 trillion, having climbed from $5.6 trillion in 2000, in part because to higher spending for an aging population, expenditures for the wars in Iraq and Afghanistan, COVID-19 programs, and tax cuts that reduced income.
Yellen and IMF Managing Director Kristalina Georgieva arrived in Zambia on separate flights on Sunday to emphasize the necessity of debt reform in Africa.
Zambia made its debt due in 2020 but has made little headway to far in restructuring it with Chinese and private creditors, which has contributed to the country’s inhabitants living in poverty.
In 2022, the world’s poorest nations would have to pay $35 billion in debt service to public and private creditors, with more than 40% of that amount owed to China, according to the World Bank.
The American Federal Reserve’s rate rises, which are intended to curb domestic inflation, and the strengthening currency have increased the expense of debt payment for African nations, the African Development Bank reported last week.
Source: Inquirer.Net
