From the article:
New IMF boss Kristalina Georgieva must grapple with the revival of government-to-government lending, with Saudi Arabia and the UAE joining the cast of major creditors that stand outside the Paris Club. Big cheques from bilateral lenders can help the IMF’s funds go further, but can obscure countries’ true debt position.
Major financings such as the $20bn of support Saudi Arabia pledged for Pakistan earlier this year, and the joint $3bn package with UAE to support Sudan through its likely restructuring, have shown that the middle eastern Kingdom is now a cornerstone lender for countries seeking funds—provided they line up with the Saudi state politically.
When Pakistan applied for its 23rd IMF programme this summer, it already owed $23bn of outstanding debt to countries outside the Paris Club, mainly China. “Our relationship to China is an important relationship, China has been of tremendous help at times when we needed help and not many friends were around, but we don’t have any favourites,” said Pakistan central bank governor Reza Baqir, speaking at the IIF conference in Washington. “We want more friends, we want our other friends who were previously more active and are now less so to come back, we don’t want to discourage anyone...
Antoinette Sayeh of the Center for Global Development and a former director in the IMF’s African department and former Liberian minister of finance, defended China’s lending. “Non-concessional borrowing can bring debt vulnerability but, if well managed, it brings development objectives,” she said. “There’s often a knee-jerk reaction to blame China for debt surprises, but China is also deeply concerned with debt sustainability in its loans. The Mozambique debt surprise, for example, was nothing to do with China.”
