One of China’s most senior development finance officials has said that multilateral institutions must retain a status that limits their losses in sovereign debt restructurings in the longer term, amid calls from Beijing for these lenders to share the burden with other creditors.
Jin Liqun, president of the Beijing-headquartered Asian Infrastructure Investment Bank, said lenders such as the World Bank and IMF needed to maintain their so-called preferred creditor status as they had a unique role to play in providing loans to developing countries in financial distress.
The AIIB is also classed as a multilateral lender and enjoys preferred creditor status. Jin said that while he could not “speak on behalf of” other multilateral lenders, “the important mission of the MDBs [was] to provide new money to sustain [highly indebted countries’] economies particularly in very difficult times”.