Résumé :
China is demonized by many commentators: it is said to be the main creditor of a large number of countries in the South and it exploits them while the World Bank
World Bank
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The World Bank brings together two organizations, the IBRD (International Bank for Reconstruction and Development) and the IDA (International Development Association). The International Bank for Reconstruction and Development (IBRD) was created in July 1944 in Bretton Woods (United States), at the initiative of 45 countries gathered for the first Monetary and Financial Conference of the United Nations.
In 2022, 189 countries are members.
Click for more details. , THE FMI
FMI
International Monetary Fund
The IMF was created in 1944 at Bretton Woods (with the World Bank, its sister institution). Its goal was to stabilize the international financial system by regulating the movement of capital.
To date, 190 countries are members (the same as the World Bank).
Click for more details. , THE Paris Club
Paris Club
Created in 1956, it is the grouping of 22 creditor states responsible for managing the difficulties of repaying bilateral debt by developing countries. Since its creation, the presidency has traditionally been held by a French person. Paris Club member states have rescheduled the debt of more than 90 developing countries. After having held up to 30% of the stock of Third World debt, the members of the Paris Club are today creditors up to 10%. The strong representation of the Club’s member states within financial institutions (IMF, World Bank, etc.) and international informal groups (G7, G20, etc.) nevertheless guarantees them considerable influence during negotiations.
The links between the Paris Club and the IMF are extremely close; they materialize in the observer status enjoyed by the IMF in the – confidential – meetings of the Paris Club. The IMF plays a key role in the debt strategy implemented by the Paris Club, which relies on its macroeconomic expertise and judgment to put into practice one of the essential principles of the Paris Club: conditionality . Conversely, the action of the Paris Club preserves the privileged creditor status of the IMF and the conduct of its adjustment strategies in developing countries.
Official site: https://www.clubdeparis.fr/, which brings together the traditional creditor powers, would do their best to come to the aid of these countries which are bending under the burden of a this
This
Multilateral debt : Debt owed to the World Bank, the IMF, regional development banks like the African Development Bank, and other multilateral institutions like the European Development Fund.
Private debt : Loans taken out by private borrowers regardless of the lender.
Public debt : All loans contracted by public borrowers.
too heavy.
For its part, China also carries out propaganda. It presents itself as the ally of the countries of the South, regularly announces debt cancellations or reductions and affirms that it does not impose conditionalities
Conditionalities
Set of neoliberal measures imposed by the IMF and the World Bank on countries which sign an agreement, in particular to obtain an arrangement for the repayment of their debt. These measures are supposed to promote the “attractiveness” of the country for international investors but severely penalize the populations. By extension, this term designates any condition imposed for the granting of aid or a loan.
neoliberal as the IMF and the World Bank do. It also emphasizes its effectiveness.
This study attempts to disentangle fact from fiction by answering different questions: What is the scale of Chinese loans? In what currency? What interest rate
Interest rate
When A lend money to B, B repays the amount loaned by A (the capital), but also an additional sum called interest, so that A has an interest in carrying out this financial transaction. The higher or lower interest rate is used to determine the amount of interest.
Let’s take a very simple example. If A borrows $100 million over 10 years at a fixed interest rate of 5%, it will repay in the first year one tenth of the capital initially borrowed ($10 million) and 5% of the capital owed, i.e. $5 million, so in total 15 million dollars. The second year, he repays another tenth of the initial capital, but the 5% only concerns $90 million remaining due, or $4.5 million, so in total $14.5 million. And so on until the tenth year when he repays the last 10 million dollars, and 5% of this remaining 10 million dollars, or 0.5 million dollars, so in all 10.5 million dollars. Over 10 years, the total repayment will be $127.5 million. In general, the repayment of capital is not made in equal installments. In the first years, repayment mainly concerns interest, and the portion of capital repaid increases over the years. Thus, in the event of a cessation of repayments, the remaining capital due is higher…
The nominal interest rate is the rate at which the loan is taken out. The real interest rate is the nominal rate minus the inflation rate.
? Does China set conditionalities when granting loans? What types of projects does it finance?
Eric Toussaint
Doctor in political science from the universities of Liège and Paris VIII, spokesperson for the international CADTM and member of the Scientific Council of ATTAC France.
He is the author of the books, World Bank – A critical historySyllepse, 2022, Capitulation between adults: Greece 2015, an alternative was possibleSyllepse, 2020, The Debt System. History of sovereign debts and their repudiationThe links that liberate, 2017; BankocracyADEN, Bruxelles, 2014 ; Trial of an exemplary manÉditions Al Dante, Marseille, 2013; A glance in the rearview mirror. Neoliberal ideology from its origins to todayLe Cerisier, Mons, 2010. He is co-author with Damien Millet of the books AAA, Audit, Cancellation, Other policyLe Seuil, Paris, 2012; Debt or lifeAden/CADTM, Brussels, 2011. This last book received the Political Book Prize awarded by the Liège Political Book Fair.
He coordinated the work of the Commission for the Truth on Greece’s Public Debt created on April 4, 2015 by the President of the Greek Parliament. This commission operated under the auspices of parliament between April and October 2015.
Morocco
