Chinese Finance Minister Liu Kun. The minister has emphasized that it is
crucial for the Belt and Road Initiative member countries and China to
come up with a framework to handle issues of debt. PHOTO | REUTERS
China will help member countries of Belt and Road Initiative
(BRI) adopt prudent financial management in a bid to diffuse concerns
over the ‘debt trap’ facing many of its borrowers in Africa, its finance
minister has said.
Speaking Thursday at a forum to
kick off a the second Belt and Road Forum (BRF) in Beijing, Liu Kun
emphasized that it was crucial for the BRI member countries and China to
come up with a framework to handle issues of debt.
“Stable
and sustainable finance management is a long term responsibility of BRI
and as a ministry we will continue to work with finance ministers of
the member countries and other financial institutions like World Bank
and International Monetary Fund (IMF) to promote high quality and
standard finance system for BRI projects globally,” said Mr Kun.
He
added “we plan to build up a debt sustainability framework to prevent
and resolve risks as well as deliver on the objectives of the BRI. We
have to strike a balance between access to development funds with its
debt sustainability.”
Mr Liu also said that Beijing
will ensure that all BRI parties adhere to international standards of
business and affordability in handling BRI projects.
The
announcement comes at a time when western powers accuse China of using
the Belt and Road initiative to bid for geopolitical influence.
The three-day Belt and Road summit is being attended by more
than 40 heads of state and representatives from more than 150 countries
and 90 international organisations.
It will be opened officially tomorrow by Chinese President Xi Jinping.
Speaking
at the event, IMF Managing Director Christine Lagarde lauded Beijing
for the BRI saying it played a crucial role in infrastructure
development.
Ms Lagarde, however, called for transparency and increased financial inclusion to make it more effective.
“We
have to go for greater openness in terms of capital flows. Our modern
financial landscape reveals enormous potential of better connections
between nations and financial institutions across the world. These
financial connections guided by the principle of openness, can lead to
new constructions, new jobs, opportunities and ultimately, achieve
economic security,” said Ms Lagarde.
World Bank Chief
Executive Officer Kristalina Georgieva said that low and middle
countries needed to spend $2.7 trillion annually up to 2030 to close the
infrastructure deficit.
She noted that World Bank has
contributed $80 billion in infrastructure projects in developing
countries and plans to contribute another $10 billion.
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