Only the U.S. and China Can Stave Off Debt Disaster
A pandemic-induced crisis threatens to hurl millions into poverty unless Washington and Beijing can work together.
China’s lack of disclosure contributed to Zambia’s default.
Photographer: Guillem Sartorio/AFP/Getty Images
Relations between the United States and China promise to be fraught even under President-elect Joe Biden’s administration. There’s one area where the two rivals can and should cooperate immediately, however: to head off a looming debt crisis that threatens to hurl millions into poverty across Africa, Latin America and Asia.
When many of the world’s poorest countries last found themselves unable to service their debts 25 years ago, the U.S. led a global effort — the 1996 Highly Indebted Poor Countries Initiative — to forgive much of that debt. The role made sense: The U.S. was the world’s sole superpower at the time and its government was a leading creditor to the 36 countries involved.