Connect with us

World

World’s poorest countries pushed to brink of collapse under China debt

Published

on

At least a dozen poor countries are buckling under the weight of hundreds of billions of dollars in debt, most of which is owed to China. 

A recent analysis, carried out by the Associated Press, found that for a dozen countries, paying back their debt is consuming a growing amount of their tax revenue needed to keep basic services going.

Among the countries analyzed was Pakistan, Kenya, Zambia, Laos and Mongolia and it was found that paying back their debt is also draining foreign currency reserves that these countries use to pay interest on the loans – leaving some with just months before that money is gone.

AP reported that behind the scenes is China’s reluctance to forgive debt and its extreme secrecy about how much money it has loaned and on what terms, which has kept other major lenders from stepping in to help. 

According to World Bank data analyzed by Statista recently, countries heavily in debt to China are mostly located in Africa, but can also be found in Central Asia, Southeast Asia and the Pacific. 

And, Statista reports that the new Belt and Road Initiative, which finances the construction of port, rail and land infrastructure, has created much debt to China for participating countries, specifically poor countries.

As of March last year, 215 cooperation documents had been signed with 149 countries on the initiative.

Countries in AP’s analysis meanwhile had as much as 50% of their foreign loans from China and most were devoting more than a third of government revenue to paying off foreign debt. 

Two of them, Zambia and Sri Lanka, have already gone into default, unable to make even interest payments on loans financing the construction of ports, mines and power plants.

In Pakistan, millions of textile workers have been laid off because the country has too much foreign debt and can’t afford to keep the electricity on and machines running, AP stated.

In Kenya, the government has held back paychecks to thousands of civil service workers to save cash to pay foreign loans. The president’s chief economic adviser tweeted last month, “Salaries or default? Take your pick.”

The study also found that since Sri Lanka defaulted a year ago, a half-million industrial jobs have vanished, inflation has risen by 50% and more than half the population in many parts of the country has fallen into poverty.

The study found that experts predict that unless China begins to soften its stance on its loans to poor countries, there could be a wave of more defaults and political upheavals.

AP’s report stated that a case study of how it has played out is in Zambia, a landlocked country of 20 million people in southern Africa that over the past two decades has borrowed billions of dollars from Chinese state-owned banks to build dams, railways and roads.

While the loans boosted Zambia’s economy, they also raised foreign interest payments so high that there was little left for the government, forcing it to cut spending on healthcare, social services and subsidies to farmers for seed and fertilizer.

In the past under such circumstances, big government lenders such as the U.S., Japan and France would work out deals to forgive some debt, with each lender disclosing clearly what they were owed and on what terms so no one would feel cheated.

But China didn’t play by those rules, AP reported. It refused at first to even join in multinational talks, negotiating separately with Zambia and insisting on confidentiality that barred the country from telling non-Chinese lenders the terms of the loans.

By late 2020, Zambia was unable to pay the interest and defaulted, setting off a cycle of spending cuts and deepening poverty. 

Since then, inflation in Zambia has increased by 50%, unemployment has hit a 17-year high and the nation’s currency, the kwacha, has lost 30% of its value in just seven months. AP also found that 3.5 million Zambians are now not getting enough food. 

AP reported that a few months after Zambia defaulted, researchers found that the country owed $6.6 billion to Chinese state-owned banks, double what many thought at the time and about a third of the country’s total debt.

China’s unwillingness however to take big losses on the hundreds of billions of dollars it is owed, as the International Monetary Fund and World Bank have urged, has left many countries on a treadmill of paying back interest, which stifles the economic growth that would help them pay off the debt.

For Pakistan, its foreign cash reserves have plunged more than 50%, according to AP’s analysis, while in nine of the 12 countries analyzed, foreign cash reserves have dropped on average of 25% in just one year. 

Based on this, Pakistan for example has only two months left of foreign cash to pay for food, fuel and other essential imports if it does not get a bailout. Other countries, such as Mongolia, have eight months left. 

AP found that last month, Pakistan was so desperate to prevent more blackouts that it struck a deal to buy discounted oil from Russia, breaking ranks with the US-led effort to shut off Vladimir Putin’s funds.

In Sri Lanka, rioters poured into the streets last July, setting homes of government ministers aflame and storming the presidential palace, sending the leader tied to onerous deals with China fleeing the country.

China has however disputed the idea that Beijing is an unforgiving lender and said in a statement that the Federal Reserve was to blame. 

It said that if it is to accede to IMF and World Bank demands to forgive a portion of its loans, so should multilateral lenders, which it views as US proxies.

“We call on these institutions to actively participate in relevant actions in accordance with the principle of ‘joint action, fair burden’ and make greater contributions to help developing countries tide over the difficulties,” the statement said.

But China’s approach to lending is widely considered more transactional and criticized as “opaque” and analysts see Beijing’s desire to access oil, minerals and other commodities as the driving force behind Chinese lenders being less prone to applying strict conditions in helping governments finance roads, bridges and railroads – so as to unlock those resources.

Just last month, US Treasury Secretary Janet Yellen told lawmakers: “I’m very, very concerned about some of the activities that China engages in globally, investing in countries in ways that leave them trapped in debt and don’t promote economic development.”

“We are working very hard to counter that influence in all of the international institutions that we participate in,” she said. 

Since 2017, China has become the world’s largest official creditor, surpassing the World Bank, IMF and 22-member Paris Club combined, Brent Neiman, a counselor to Yellen, said late last year. 

Politico meanwhile reported earlier this month that China’s financing of projects in other countries between 2000 and 2017 totaled more than $800 billion, most of that in the form of loans.

But for some poor countries struggling to repay China, they now find themselves stuck in a kind of loan limbo: China won’t budge in taking losses, and the IMF won’t offer low-interest loans if the money is just going to pay interest on Chinese debt.

 

World

US readies new Russia sanctions if Putin rejects peace deal, Bloomberg News reports

A State Department spokesperson told Reuters it does not preview sanctions.

Published

on

The United States is preparing a further round of sanctions targeting Russia’s energy sector to increase pressure on Moscow should it reject a peace deal with Ukraine, Bloomberg News reported on Wednesday, citing people familiar with the matter.

A White House official told Reuters that U.S. President Donald Trump had made no new decisions regarding Russian sanctions.

 “It is the role of agencies to prepare options for the president to execute,” the official said.

Bloomberg had reported the U.S. was considering options including targeting vessels in what is known as Russia’s shadow fleet of tankers used to transport exported oil, as well as traders who facilitate such transactions.

The new measures could be announced as early as this week, the report said, adding that Treasury Secretary Scott Bessent discussed the move with a group of European ambassadors this week.

“It is explicitly false to conclude any decisions have been made regarding future sanctions against Russia. As we have said for months, all options remain on the table in support of President Trump’s tireless efforts to stop the senseless killing, and to achieving a lasting, durable peace,” a U.S. Treasury Department spokesperson said.

A State Department spokesperson told Reuters it does not preview sanctions.

Asked about the Bloomberg article, the Kremlin said it had not seen the report but that any sanctions harm efforts to mend U.S.-Russia relations.

Continue Reading

World

Trump adds seven countries, including Syria, to full travel ban list

The White House cited visa overstay rates for Syria in its justification for the ban.

Published

on

U.S. President Donald Trump on Tuesday expanded a list of countries subject to a full travel ban, prohibiting citizens from an additional seven countries, including Syria, from entering the United States.

The White House said in a statement that Trump signed a proclamation “expanding and strengthening entry restrictions on nationals from countries with demonstrated, persistent, and severe deficiencies in screening, vetting, and information-sharing to protect the Nation from national security and public safety threats.”

Tuesday’s move banned citizens from Burkina Faso, Mali, Niger, South Sudan, Syria and those holding Palestinian Authority-issued travel documents. The action also imposes a full ban on Laos and Sierra Leone, which had previously only been subject to partial restrictions.

The White House said the expanded ban goes into effect on January 1.

The action comes despite Trump’s vow to do everything he could to make Syria successful after landmark talks in November with Syrian President Ahmed al-Sharaa, a former al Qaeda commander who until recently was sanctioned by Washington as a foreign terrorist.

Trump has backed Sharaa, whose visit capped a stunning year for the rebel-turned-ruler who toppled longtime autocratic leader Bashar al-Assad and has since traveled the world trying to depict himself as a moderate leader who wants to unify his war-ravaged nation and end its decades of international isolation.

But in a post on his Truth Social platform on Saturday, Trump vowed “very serious retaliation” after the U.S. military said two U.S. Army soldiers and a civilian interpreter were killed in Syria by a suspected Islamic State attacker who targeted a convoy of American and Syrian forces before being shot dead. He described the incident in remarks to reporters as a “terrible” attack.

The White House cited visa overstay rates for Syria in its justification for the ban.

“Syria is emerging from a protracted period of civil unrest and internal strife. While the country is working to address its security challenges in close coordination with the United States, Syria still lacks an adequate central authority for issuing passports or civil documents and does not have appropriate screening and vetting measures,” the White House said.

Trump signed a proclamation in June banning the citizens of 12 countries from entering the United States and restricting those from seven others, saying it was needed to protect against “foreign terrorists” and other security threats. The bans apply to both immigrants and non-immigrants, such as tourists, students and business travelers.

The travel ban remains on those twelve countries, the White House said.

Trump also added partial restrictions and entry limitations on an additional 15 countries, including Nigeria, which is under scrutiny from Trump, who in early November threatened military action over the treatment of Christians in the country.

Nigeria says claims that Christians face persecution misrepresent a complex security situation and do not take into account efforts to safeguard religious freedom.

Since returning to office in January, Trump has aggressively prioritized immigration enforcement, sending federal agents to major U.S. cities and turning away asylum seekers at the U.S.-Mexico border.

The expansion of the countries subject to entry restrictions marks a further escalation of immigration measures the administration has taken since the shooting of two National Guard members in Washington, D.C., last month.

Investigators say the shooting was carried out by an Afghan national who entered the U.S. in 2021 through a resettlement program under which Trump administration officials have argued there was insufficient vetting.

Days after the shooting, Trump vowed to “permanently pause” migration from all “Third World Countries,” although he did not identify any by name or define the term.

Continue Reading

World

Father and son behind Bondi Jewish festival shooting that killed 15, Australian police say

Published

on

Two alleged gunmen who killed 15 people at a Jewish celebration at Sydney’s Bondi Beach were a father and son, police said on Monday, as Australia began mourning victims of its worst gun violence in almost 30 years.

The father, a 50-year-old, was killed at the scene, taking the number of dead to 16, while his 24-year-old son was in a critical condition in hospital, police said at a press conference on Monday. The father and son were identified as Sajid Akram and Naveed Akram, respectively, by state broadcaster ABC and other local media outlets, Reuters reported.

Officials have described Sunday’s shooting as a targeted antisemitic attack.

Forty people remain in hospital following the attack, including two police officers who are in a serious but stable condition, police said. The victims were aged between 10 and 87.

Witnesses said the attack at the famed beach, which was packed on a hot evening, lasted about 10 minutes, sending hundreds of people scattering along the sand and into nearby streets.

Police said around 1,000 people had attended the targeted Hanukkah event, which was held in a small park off the beach.

A bystander captured on video tackling and disarming an armed man during the attack has been hailed as a hero whose actions saved lives. 7News Australia named him as Ahmed al Ahmed, citing a relative, who said the 43-year-old fruit shop owner had been shot twice and had undergone surgery.

A fundraising page for the man had raised more than A$350,000 ($233,000) by Monday afternoon.

Police did not release the shooters’ names, but said the father had held a firearms license since 2015 and had six licensed weapons.

Home Minister Tony Burke said the father arrived in Australia in 1998 on a student visa, while his son is an Australian-born citizen.

Police did not provide details about the firearms, but videos from the scene showed the men firing what appeared to be a bolt-action rifle and a shotgun.

“We are very much working through the background of both persons. At this stage, we know very little about them,” New South Wales Police Commissioner Mal Lanyon told reporters.

Bondi local Morgan Gabriel, 27, said she had been heading to a nearby cinema when she heard what she thought were fireworks, before people started running up her street.

“I sheltered about six or seven. Two of them were actually my close friends, and the rest were just people that were on the street. But people, their phones had been left down the beach, and everyone was just trying to get away,” she said.

“It’s a very sad time this morning… Normally, like on a Monday or any morning, it’s packed. People are swimming, surfing, running. So this is very, very quiet. And there’s definitely a solemn sort of vibe.”

A makeshift memorial with flowers and Israeli and Australian flags was set up at the Bondi pavilion and an online condolence book was established. Police and private Jewish security guards wearing earpieces were positioned around as mourners paid respects and laid flowers.

WORLD LEADERS CONDEMN THE ATTACK

Authorities said they were confident only two attackers were involved in the incident, after previously saying they were checking whether a third offender was involved.

At the suspects’ home in Bonnyrigg, a suburb around 36 km (22 miles) west of the CBD, there was a heavy police presence on Monday, with a cordon wrapping around several neighbouring houses.

Australian Prime Minister Anthony Albanese visited Bondi Beach on Monday morning to lay flowers near the scene of the attack.

“What we saw yesterday was an act of pure evil, an act of antisemitism, an act of terrorism on our shores in an iconic Australian location,” Albanese told reporters.

“The Jewish community are hurting today. Today, all Australians wrap our arms around them and say, we stand with you. We will do whatever is necessary to stamp out antisemitism. It is a scourge, and we will eradicate it together.”

Albanese later urged Australians to light a candle in solidarity with the Jewish community “to show that light will indeed defeat darkness – part of what Hanukkah celebrates”, he said.

Albanese said several world leaders including U.S. President Donald Trump and French President Emmanuel Macron had reached out and offered condolences and support.

Sunday’s shootings were the most serious in a string of antisemitic attacks on synagogues, buildings and cars in Australia since the beginning of Israel’s war in Gaza in October 2023.

Israeli Prime Minister Benjamin Netanyahu said he had warned Albanese that Australia’s support for Palestinian statehood would fuel antisemitism.

In August, Australia accused Iran of directing at least two antisemitic attacks and gave Tehran’s ambassador a week to leave the country.

‘SAW BODIES ON THE GROUND’

Mass shootings are rare in Australia, one of the world’s safest countries. Sunday’s attack was the worst since 1996, when a gunman killed 35 people at the Port Arthur tourist site in the southern island state of Tasmania.

Rabbi Mendel Kastel, whose brother-in-law Eli Schlanger was killed in Sunday’s attack, said it had been a harrowing evening.

“You can very easily become very angry and try to blame people, turn on people but that’s not what this is about. It’s about a community,” he said.

“We need to step up at a time like this, be there for each other, and come together. And we will, and we will get through this, and we know that. The Australian community will help us do it,” he added.

Local woman Danielle, who declined to give her surname, was at the beach when the shooting occurred and raced to collect her daughter, who was attending a bar mitzvah at a function centre near where the alleged shooters were positioned.

“I heard there was a shooting so I bolted there to get my daughter, I could hear gunshots, I saw bodies on the ground. We are used to being scared, we have felt this way since October 7.”

Hamas militants attacked Israel on October 7, 2023, killing around 1,200 people, according to Israeli tallies. The attack precipitated Israel’s war in Gaza, which has killed more than 70,000 Palestinians, according to Gaza health authorities.

Australia’s Jewish diaspora is small but deeply embedded in the wider community, with about 150,000 people who identify as Jewish in the country of 27 million. About one-third of them are estimated to live in Sydney’s eastern suburbs, including Bondi.

Major cities including Berlin, London and New York stepped up security around Hanukkah events on Sunday following the attack at Bondi.

Continue Reading
Advertisement
Advertisement
Advertisement
Advertisement

Trending

Copyright © 2025 Ariana News. All rights reserved!