Opinion by Mathew Carr
Oct. 3, 2023 — The front-page lead story in the Financial Times about the IMF softening its stance toward letting China have more influence in the global lender might be a signal of US-China relations thawing.
That bodes well for G20 and UN climate negotiations — multilateralism in general.
Here is a snip of the story:
I’m intrigued that the story above makes no mention of Sri Lanka, where there is a fraught negotiation over the bankrupt-island-nation’s debt.
That story is covered by the FT’s sister agency Nikkei, also today:
The Nikkei article includes this:
“Multiple diplomatic sources from Asian and Western missions in Colombo told Nikkei Asia that China’s foot-dragging on Sri Lanka’s debt was an issue.”
A November 2022 study, published by the U.S.-based Johns Hopkins University, observed that “China’s approach to Sri Lanka’s debt restructuring and the extent of debt relief offered will set a precedent for China’s role and behavior in other countries.”
The fact that China is (sort of) being offered more influence over the IMF might mean the mask of geopolitical tension between petro states China and the US is slipping … a bit at least. I’m an optimistic guy.
This bodes well for climate talks because debt-for-nature swaps — such as that being sought by Sri Lanka — may be a big part of any global climate settlement reached during the next few months (or years). This settlement might include some acknowledgement of improper use of debt by the IMF, in the past.
It does not seem right that the US can veto IMF decisions, given America’s blame for the climate crisis and as the world seeks to establish a climate loss and damage fund — perhaps at the IMF(?).