IMF’s Georgieva says China, other big creditors must work to prevent debt ‘explosion’

REUTERS/ Hereward Holland
International Monetary Fund chief Kristalina Georgieva meets Democratic Republic of Congo President Felix Tshisekedi in Kinshasa, Democratic Republic of Congo, December 8, 2021.

WASHINGTON (Reuters) – China and other big creditors have a responsibility to prevent the debt problems facing emerging market and low-income countries from exploding, International Monetary Fund Managing Director Kristalina Georgieva said on Tuesday.

Georgieva, speaking at an event hosted by the Center for Global Development, said 25% of emerging market and 60% of low-income countries were in or near debt distress.

“My message to the large creditors, to China, the private sectors … is that the larger your share is, the bigger your responsibility,” she said. “It is in your interest as creditors to prevent a problem from exploding.”

Specifically, Georgieva said she hopes to see Sri Lanka’s public creditors quickly engaged and then bringing private creditors on board for debt negotiations.

Earlier on Tuesday the Sri Lankan government said financial advisory group Lazard started talks with India, China and Japan on restructuring Sri Lanka’s debt.