If there is a country that is competing with him IMF, the World Bank and other multilateral organizations in lending to developing economies is China. The latest example came this week when the prime minister of Sri Lanka, the nationalist Gotabaya Rajapaksa announced that he would ask China, and not the IMF, for a loan of 500 million dollars (425 million euros) to avoid having to declare a suspension of payments.
However, China has not been as receptive to forgiving or providing payment facilities to developing countries to which it has granted credits. Amid a growing debt moratorium for developing countries so that They can avoid the suspension of payments Due to the implosion of their economies by Covid-19, the Beijing authorities have hinted that these grace measures do not go with them.
So declared yesterday the FMI managing director; Kristalina Georgieva, stating that most of the official bodies dedicated to granting credit to developing countries are ignoring calls for a moratorium on debt repayment. “What we see from China is that it is a new borrower, but also a very large borrower,” Georgieva said, as reported by the Reuters news agency.
The forgiveness – or, at least, the moratorium – on external debt is one of the keys to combat the impact of Covid-19 in emerging economies, as has already been stated in the negotiations between Argentina and the Fund to restructure, once again, the debt of that Latin American country. The importance of these grace measures is key, because the idea that the reactivation of the world economy is not going to have a ‘V’ shape – that is, a rapid decline marked by an equally rapid reactivation – already forms part of the consensus of experts. The last to advocate that has been the International Energy Agency (IEA), which, in its annual report ‘World Energy Perspectives‘, estimates that, in the best of possible scenarios, the demand for oil in the world will not reach the previous levels the pandemic until 2023.
The IEA, which groups together the large industrialized hydrocarbon importing economies, estimates that the source of energy that is falling into the auger is coal, which is the main generator of gases that produce the ‘greenhouse effect’. According to the ‘World Energy Outlook’, the demand for coal, which reached 5.5 billion tonnes equivalent in 2018, will fall to 5,100 in 2025.
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