China has asked multilateral creditors such as the World Bank to explore various options to provide more support to the poorest countries to ease their debt burden.
Finance Minister Liu Kun made the call in an interview posted on the finance ministry’s website on Friday.
While providing positive net inflows to countries eligible for the Debt Service Suspension Initiative (DSSI), multilateral creditors should be involved in the debt treatment process to help poorer countries get through tough times, he said. Liu.
The G20 launched the DSSI in April to address the immediate liquidity needs of low-income countries, as the COVID-19 pandemic added vulnerability risks to debt.
Multilateral creditors now hold the bulk of the debt service payments owed by poorer countries, Liu said, noting that they account for nearly half of the total public and publicly guaranteed debt of countries eligible for DSSI.
“If the World Bank participates in debt treatment by creating a multilateral debt relief facility, China will positively consider providing grants to help ease the debt burden of the poorest countries,” Liu said.