A major philosophical difference is emerging as a hold-up to Zambia’s much-needed debt relief. Foreign Ministry spokesperson Mao Ning recently said the key to easing Zambia’s debt burden “lies in the participation of multilateral financial institutions and commercial creditors in the debt-relief efforts.”
In other words, China wants Multilateral Development Banks (MDBs) like the World Bank to accept losses. The MDBs have so far been exempted from ‘haircuts’ in debt restructuring processes.
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