Illustration: Tang Tengfei/GT

With developing countries lagging behind developed countries in economic recovery due to unequal vaccine accessibility among other reasons, the stalled G20 debt relief plan for distressed countries is facing heated debate, in which US officials and experts have opted to slander China, once again.

 US nonprofit organization Jubilee USA's executive director Eric LeCompte recently said that China was slowing the process down, the South China Morning Post reported. It appears China wants to cut its own debt deals before the G20 Common Framework for Debt Treatments process is more fully implemented, said LeCompte.

Ahead of the meeting of G20 finance ministers and central bankers in Jakarta on February 17, US Treasury Secretary, Janet Yellen, reportedly placed similar blame on China on the issue. She said the G20's Debt Service Suspension Initiative (DSSI) "has not been going very rapidly" and called on China to be "more active" in the G20 debt relief efforts.

Since the pandemic, to deal with excessive debt burdens, the G20 produced the DSSI - a program to defer official debt service due by mostly low-income countries (LICs) in 2020 which was then extended through the end of 2021. In November 2020, the G20 reached an agreement on a Common Framework for Debt Treatments to help 70 countries in danger of default.

However, more than a year has passed, and only three countries - Chad, Zambia and Ethiopia - sought help and not one of them has received any debt relief, said a report from the Washington and London-based Center for Global Development. And the meeting of G20 finance ministers and central bankers in February also ended without a solution to the debt crisis. Since then, the US and some multilateral groups have again shifted blame on China.

It's been proved that such ill-intentioned accusations are sheer nonsense. In fact, China has fully implemented the G20 DSSI. The total debt service payments suspended by China are the largest among G20 members, according to China's Foreign Ministry.

In addition, China's non-official financial institutions have also taken debt service suspension actions in a comparable manner with reference to the DSSI provisions. China also handled some countries' debt on a case-by-case basis under the Common Framework for debt treatment. These measures all play a positive role in easing relevant countries' debt burdens.

According to authoritative international agencies, multilateral development banks and private creditors, mainly commercial institutions of developed countries, account for a large part of the debt structure of these heavily indebted poor countries. For instance, multilateral financial institutions and commercial creditors account for more than three quarters of the total external debt owed by African countries. They apparently bear a greater responsibility in helping developing countries reduce their debt burden. 

Notably, the debt problems of developing countries continue escalating with the ongoing impact of the pandemic, and they are also facing greater inequality problem in kick starting an economic recovery. Citing World Bank calculation, the Reuters reported that 74 low-income nations must repay $35 billion to bilateral and private lenders this year - nearly double from 2020. With the US Federal Reserve on the verge of hiking interest rates, borrowing costs are set to increase for riskier emerging markets.

To properly resolve the current debt predicament of developing countries and help their economies endure the COVID-19 impacts, the G20, the most active communication and coordination mechanism in current global economic governance, should continue to coordinate efforts of all parties to advance existing debt relief program.

It is obvious that developed countries like the US should shoulder greater responsibility and make greater effort. Since the pandemic, the US' quantitative easing policy has created significant spillover effects on the global economy. When the US and European countries tighten monetary policy, they must fully consider the potential impacts on developing countries and take more responsible approaches.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn