China applauded US Treasury Secretary Janet Yellen this week after she accused Beijing of being a “block” to debt reform for Africa and told Washington to “get over its own debt problem”.
“The biggest contribution the United States can make to foreign debt issues is to engage in responsible monetary policy, overcome its own debt problem, and stop active efforts by other sovereign countries to solve their debt problems,” the Chinese embassy said in a statement. in Zambia told Reuters on Wednesday.
Yellen, along with International Monetary Fund Executive Director Kristalina Georgieva, arrived in Zambia on Sunday to discuss debt reform in Africa.
US hits debt ceiling, threatens economic outlook
US officials have long warned that China is looking to countries in Africa where it offers loans to poor countries that ultimately default on the loan to keep them loyal to Chinese interests;
Zambia, for example, defaulted on its debt in 2020 and has made little progress in restructuring payments with China and private lenders, pushing its economy to the brink as poverty levels rise.
In 2022, the World Bank noted that the world’s poorest countries owe $35 billion in debt service to public and private lenders, 40% of which is owed to China, Reuters reports.
YELLEN SAYS TREASURER WILL TAKE ADDITIONAL ‘EMERGENCY MEASURES’ ON DEBT LIMIT.
However, the US faces its own financial woes as Republicans risk the federal government’s debt as the GOP pushes to cut federal spending programs like Medicare and Social Security in the fight over the debt ceiling.
As U.S. lawmakers grapple with Washington’s economy-driven policies, Yellen has seen the challenges during her three-nation trip to Africa, which aims to demonstrate the U.S.’s commitment as a leading partner in the region.
However, Yellen’s trip is reportedly a tough sell by the Biden administration after aid to African countries was cut under the Trump administration, coupled with economic hardships caused by the COVID pandemic and now food shortages amid the war in Ukraine.
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“I don’t know how I can give assurances, to be honest,” Yellen told Reuters on her way from Senegal to Zambia.
Yellen said both Democrats and Republicans are interested in health and trade initiatives with African partners, but convincing African countries that Washington can be a reliable long-term partner is the ultimate challenge.