Yellen Rebukes Chinese Lending Practices in Call for Debt Relief
The New York Times
In an interview, the Treasury secretary also highlighted progress at the World Bank and the International Monetary Fund ahead of annual meetings this week.
Treasury Secretary Janet L. Yellen rebuked China’s “opaque” lending practices and urged global financial institutions and other creditors to accelerate debt relief to low- and middle-income countries in an interview on Monday.
Her comments came ahead of this week’s annual meetings of the International Monetary Fund and the World Bank, where global economic policymakers are gathering in Washington at a pivotal moment for the world economy. Inflation has eased, but war in the Middle East has threatened to jolt energy markets. High interest rates are dogging poorer economies, which have struggled to pursue critical development initiatives given their mounting debt burdens.
“It’s a substantial burden and can impede their investments in things that will promote sustainable development or dealing with pandemics or climate change,” Ms. Yellen said of the debt burdens of low- and middle-income countries.
The I.M.F. and the World Bank have faced backlash in recent years for moving too slowly in their efforts to help struggling economies and for pushing nations to enact economic reform measures, such as sharp spending cuts, that have brought resistance and social unrest.
The Treasury secretary will hail signs of progress at multilateral institutions like the monetary fund and the World Bank in a speech on Tuesday that highlights an expansion of lending capacity and faster approval of new projects under the direction of the Biden administration.
Global debt continues to be a problem, however, and the United States has been pushing for a broader international relief initiative that goes beyond efforts to aid countries that are on the brink of defaulting on their loans.
