The Group of 20 wrapped up yet another high-profile summit on Sunday that will once again disappoint anyone looking to the world’s wealthiest countries for leadership in resolving the developing world’s burgeoning debt crisis.
The final communiqué repeated the same, tired ideas that we saw just a month ago when G20 finance ministers met. Then, as now, they complained about the lack of participation by the private sector, issued vague promises of more support from the IMF, and talked up how successful their meagre debt suspension efforts have been to date.
The fact that their debt suspension initiative (DSSI) has saved countries a measly US$5,7 billion — a tiny, insignificant portion of the estimated US$178 billion that developing countries are believed to owe.
Let’s face it, the fact that so much of the world’s debt is either owed to China or private creditors makes the G20 largely a secondary actor here. Further, we should stop pretending that at some point the US, Europe, and Japan are going to marshall the nerve to take on either powerful forces in Beijing or on Wall Street/The City to demand concessions on behalf of the world’s poorest countries.
That’s just not going to happen. After all, Donald Trump was so bored with the whole affair that he ditched the webinar to go play golf.
And a weak, ineffective G20 is a gift with a giant bow on it to President Xi Jinping and the Chinese government. They’re getting all of the political upside of claiming how they’re working so well within the DSSI framework, support the multilateral approach to debt relief, and are now the G20’s most generous country in debt mitigation at little to no expense.
After all, the Chinese still haven’t budged on their policy banks’ commercial loans that are excluded from DSSI, they haven’t improved transparency one bit and the debt suspensions they’ve agreed to in places like Zambia and Angola are just that — suspensions — which means they’re going to get paid back in full, just a few years later than they expected.
So, what do we do about it? To be honest, I’m not entirely sure. I’m not going to pretend there’s an easy solution here because there isn’t one. But continuing to believe that the old system still actually works is foolish.
This article was published in partnership with The China Africa Project.