US Treasury Secretary Scott Bessent has indicated that several low-income nations may need to restructure their sovereign debt. Sixty-nine low-income countries have been identified as at risk of debt distress, with more than half classified as high risk or already in distress. He is advocating for a revised Debt Sustainability Framework used by the IMF and World Bank, as well as a more equitable burden-sharing of losses among creditors, implicitly criticizing China’s opaque lending practices. The current G20 mechanism, the Common Framework established in 2020, is considered too slow, with only a handful of countries having completed the process since its inception. The central question remains whether China will accept comparable treatment with other creditors.
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