Sri Lanka announced on Tuesday that it would be defaulting on all of its external debt of $51 billion, after running out of foreign exchange for imports. Colombo called the move a "last resort."

Sri Lanka announces defaults on $51 bn external debt

Sharpening Moscow's stone in its financial wrestle with the West now Russia will take legal action if West tries to force it to default on its sovereign debt. Russia's finance minister said however he did not elaborate on Russia's legal options that are going to be available.

Russia threatens legal action if forced into sovereign debt default

Global government debt is set to now rise 9.5 this year to a record 71.6 trillion dollar. It has been driven so far by the US, Japan and Chinese governments across the world, they have ramped up borrowing owing to the covid-19 pandemic.

Global government debt set to soar to record $71.6 trillion this year

The US has frozen the foreign currency reserves of Russia. The US will now halt Russian debt payments. Russia still has 30 day grace period to make payments. Russian bondholders brace for the next hurdles.

US building financial pressure on Russia by stopping Russian debt payments

With Sri Lanka's economic situation getting worse, two of the country's major newspapers are suspending their print editions due&nbsp;to a lack of paper.

The island is facing its worst economic meltdown since it gained its&nbsp;independence from Britain in 1948.

The country was already in a big economic crisis when the pandemic began, reducing foreign worker remittance and damaging a key source of dollars for Sri Lanka's economy, the tourism sector.

Also read |&nbsp;<a href="https://www.wionews.com/south-asia/us-asks-sri-lanka-to-end-detentions-improve-rights-465086">US asks Sri Lanka to end detentions, improve rights</a>

Upali Newspapers said that their English- language daily, The Island and its Sinhalese version, Divaina will now only be available online&nbsp;"in view of the prevailing newsprint shortage"&nbsp;in the country.

Other main national&nbsp;dailies have also reduced the number of pages in their editions after the costs hiked&nbsp;by over a third in the past five months and having difficulties securing supplies from abroad.

Schools in Sri Lanka have had to postpone tests for three million students as the school authorities failed to source ink and papers.

Also read |&nbsp;<a href="https://www.wionews.com/south-asia/amid-economic-crisis-in-the-island-nation-6-sri-lankan-nationals-illegally-enter-india-via-boat-464747">Amid economic crisis in the island nation, 6 Sri Lankan nationals illegally enter India via boat</a>

People have to wait for hours in a queue at gasoline pumps. At least four people have died waiting in long queues in the past week.

The government earlier this month allowed the rupee to depreciate and also announced that it is&nbsp;seeking help from&nbsp;IMF to clear its foreign debt.

The country is also seeking loans from India, China and other countries to overcome the current economic crisis.

The South Asian Island nearly needs $7 billion to pay for its external debts. The country’s foreign reserves have hit a low since the current government came in power in November 2019,&nbsp;from $7.5 billion to $2.3 billion.

Watch |&nbsp;Gravitas: What caused Sri Lanka's economic crisis?

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/gravitas-what-caused-sri-lankas-economic-crisis-464997/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

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Sri Lanka has witnessed a record inflation of 17.5 per cent in February. This is fueled by the dollar shortage which has sparked energy shortages that are affecting all sectors and has led to skyrocketing prices with inflation reaching its fifth consecutive monthly high.

Officials of the Energy Ministry said that they have managed to raise $42 million has been by Friday. These funds will be used&nbsp;to pay for a cargo of diesel and aviation fuel that has been held up at the Colombo port for nearly two weeks as there were&nbsp;no dollars to pay for it.

(With inputs from agencies)
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With Sri Lanka's economic situation getting worse, two of the country's major newspapers are suspending their print editions due to a lack of paper. The island is facing its worst economic meltdown since it gained its independence from Britain in 1948.

With Sri Lanka's economic situation getting worse, two of the country's major newspapers are suspending their print editions due to a lack of paper. The island is facing its worst economic meltdown since it gained its independence from Britain in 1948. The country was already in a big economic crisis when the pandemic began, reducing foreign worker remittance and damaging a key source of dollars for Sri Lanka's economy, the tourism sector. Also read | US asks Sri Lanka to end detentions, improve rights Upali Newspapers said that their English- language daily, The Island and its Sinhalese version, Divaina will now only be available online "in view of the prevailing newsprint shortage" in the country. Other main national dailies have also reduced the number of pages in their editions after the costs hiked by over a third in the past five months and having difficulties securing supplies from abroad. Schools in Sri Lanka have had to postpone tests for three million students as the school authorities failed to source ink and papers. Also read | Amid economic crisis in the island nation, 6 Sri Lankan nationals illegally enter India via boat People have to wait for hours in a queue at gasoline pumps. At least four people have died waiting in long queues in the past week. The government earlier this month allowed the rupee to depreciate and also announced that it is seeking help from IMF to clear its foreign debt. The country is also seeking loans from India, China and other countries to overcome the current economic crisis. The South Asian Island nearly needs $7 billion to pay for its external debts. The country’s foreign reserves have hit a low since the current government came in power in November 2019, from $7.5 billion to $2.3 billion. Watch | Gravitas: What caused Sri Lanka's economic crisis? Sri Lanka has witnessed a record inflation of 17.5 per cent in February. This is fueled by the dollar shortage which has sparked energy shortages that are affecting all sectors and has led to skyrocketing prices with inflation reaching its fifth consecutive monthly high. Officials of the Energy Ministry said that they have managed to raise $42 million has been by Friday. These funds will be used to pay for a cargo of diesel and aviation fuel that has been held up at the Colombo port for nearly two weeks as there were no dollars to pay for it. (With inputs from agencies)

Two major Sri Lankan newspapers suspend print editions as economic crisis surges

6-time Grand Slam winner Boris Becker appeared in court over his refusal to settle an unpaid debt. Becker was earlier asked to auction off his Grand Slam trophies to raise money. Palki Sharma traces Becker's fall from grace.

Gravitas: Boris Becker on trial over unpaid debt

Iran has released 2 British nationals. This comes after London "settled a long-overdue debt" of over $500 million to Tehran. Did a 40-year-old claim hold back the release of two British detainees? Palki Sharma tells you more.

Gravitas: 40-year-old debt held back release of British detainees?

Argentina's&nbsp;Senate&nbsp;on Thursday gave final approval to an agreement with the International Monetary Fund that restructures a $45&nbsp;billion&nbsp;debt, clearing the country's short-term financial horizon but leaving a serious inflationary challenge.

The late-night vote greenlights the new credit program ironed out between&nbsp;Argentine&nbsp;officials and&nbsp;IMF&nbsp;staff as they sought to finalize the&nbsp;debt, the legacy of a record loan contracted in 2018 under former president Mauricio Macri.

Outside the&nbsp;Senate, several hundred people demonstrated, called by unions and leftist movements to oppose the restructuring.

Also read |&nbsp;<a href="https://www.wionews.com/world/after-pakistan-china-to-build-nuclear-power-plant-in-argentina-453096">After Pakistan, China to build nuclear power plant in Argentina</a>

Last week, the agreement won the approval of the&nbsp;Chamber of Deputies&nbsp;with a broad consensus between the center-left ruling coalition and the center-right opposition, a rarity in&nbsp;Argentina.

Faced with the spectre of a ruinous payment default if the agreement was not approved, the&nbsp;Senate&nbsp;greenlit it by a vote of 56 to 13, with three abstentions.

"It is the responsibility of our government to build certainty in a context of uncertainty," Economic Minister Martin Guzman, the&nbsp;deal's chief architect, said in defending the package before senators.

The agreement provides for a series of macroeconomic measures to control the country's chronic inflation (50.9 percent in 2021) and reduce its budget deficit of three percent of GDP last year until it is balanced in 2025.&nbsp;

Under the agreement, which must also be ratified by the&nbsp;IMF&nbsp;board of directors before it comes into force, the fund will monitor&nbsp;Argentina's progress regularly.

In 2018, under the government of center-right Macri, the&nbsp;IMF&nbsp;approved its biggest-ever loan of $57&nbsp;billion&nbsp;to&nbsp;Argentina. The country received $44&nbsp;billion&nbsp;of that amount.

Macri's successor, Alberto Fernandez, refused to accept the rest and sought to renegotiate repayment terms.&nbsp;

Also read |&nbsp;<a href="https://www.wionews.com/world/britain-lambasts-china-for-supporting-argentinas-falklands-islands-claim-451290">Britain lambasts China for supporting Argentina's Falklands Islands claim</a>

Payments of $19&nbsp;billion&nbsp;and $20&nbsp;billion&nbsp;were due this year -- a timeline the government considered impossible.

Argentina&nbsp;is just emerging from three years of economic recession and battling rising inflation and a high poverty rate.

The country recorded a 4.7 percent jump in its consumer price index in February compared to January, with a 7.5 percent rise in the cost of food.

Under the new&nbsp;deal&nbsp;-- the 13th that Buenos Aires has signed with the&nbsp;IMF&nbsp;since the return of democracy in 1983 -- repayments will be made from 2026 to 2034 after a grace period.

Argentina&nbsp;has committed to reducing its fiscal deficit from 3.0 percent of GDP today to 0.9 percent by 2024.

IMF&nbsp;spokesman Gerry Rice said the aim of the&nbsp;deal&nbsp;was to "reduce persistently high inflation" but warned of the challenges faced by the global economy following Russia's invasion of Ukraine.&nbsp;

The&nbsp;parliament&nbsp;building was fenced off ahead of the&nbsp;Senate&nbsp;vote last week, following protests when the lower house approved the bill, with some demonstrators burning rubbish and throwing stones towards the building entrance.

A police officer was struck by a Molotov cocktail and some windows were hit with stones, including those at the offices of the&nbsp;Senate&nbsp;president and Vice President Cristina Kirchner.

&nbsp;

Argentina's Senate on Thursday gave final approval to an agreement with the International Monetary Fund that restructures a $45 billion debt, clearing the country's short-term financial horizon but leaving a serious inflationary challenge.

Argentina's Senate on Thursday gave final approval to an agreement with the International Monetary Fund that restructures a $45 billion debt, clearing the country's short-term financial horizon but leaving a serious inflationary challenge. The late-night vote greenlights the new credit program ironed out between Argentine officials and IMF staff as they sought to finalize the debt, the legacy of a record loan contracted in 2018 under former president Mauricio Macri. Outside the Senate, several hundred people demonstrated, called by unions and leftist movements to oppose the restructuring. Also read | After Pakistan, China to build nuclear power plant in Argentina Last week, the agreement won the approval of the Chamber of Deputies with a broad consensus between the center-left ruling coalition and the center-right opposition, a rarity in Argentina. Faced with the spectre of a ruinous payment default if the agreement was not approved, the Senate greenlit it by a vote of 56 to 13, with three abstentions. "It is the responsibility of our government to build certainty in a context of uncertainty," Economic Minister Martin Guzman, the deal's chief architect, said in defending the package before senators. The agreement provides for a series of macroeconomic measures to control the country's chronic inflation (50.9 percent in 2021) and reduce its budget deficit of three percent of GDP last year until it is balanced in 2025. Under the agreement, which must also be ratified by the IMF board of directors before it comes into force, the fund will monitor Argentina's progress regularly. In 2018, under the government of center-right Macri, the IMF approved its biggest-ever loan of $57 billion to Argentina. The country received $44 billion of that amount. Macri's successor, Alberto Fernandez, refused to accept the rest and sought to renegotiate repayment terms. Also read | Britain lambasts China for supporting Argentina's Falklands Islands claim Payments of $19 billion and $20 billion were due this year -- a timeline the government considered impossible. Argentina is just emerging from three years of economic recession and battling rising inflation and a high poverty rate. The country recorded a 4.7 percent jump in its consumer price index in February compared to January, with a 7.5 percent rise in the cost of food. Under the new deal -- the 13th that Buenos Aires has signed with the IMF since the return of democracy in 1983 -- repayments will be made from 2026 to 2034 after a grace period. Argentina has committed to reducing its fiscal deficit from 3.0 percent of GDP today to 0.9 percent by 2024. IMF spokesman Gerry Rice said the aim of the deal was to "reduce persistently high inflation" but warned of the challenges faced by the global economy following Russia's invasion of Ukraine. The parliament building was fenced off ahead of the Senate vote last week, following protests when the lower house approved the bill, with some demonstrators burning rubbish and throwing stones towards the building entrance. A police officer was struck by a Molotov cocktail and some windows were hit with stones, including those at the offices of the Senate president and Vice President Cristina Kirchner.

Argentina parliament approves IMF deal to restructure $45 billion debt

Russia needs to pay $117 million to its creditors this week. World Bank's Chief Economist said Moscow is "mightily close" to a default. Can a Russian default trigger a global recession? Palki Sharma brings you a report.

Gravitas: Russia could default on its debt within days

International rating agency Fitch has downgraded Russia’s sovereign rating, warning a default is "imminent".

It has downgraded Russia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘C’ from ‘B’. &nbsp;It means that Russia will soon be unable to pay its debts.

A low rating means the chances of not getting repaid is considered to be high - and so an investor will charge more to lend to that country.

The move comes amid increasing international sanctions against Russia in the wake of the invasion of Ukraine.

"This rating action follows our downgrade... on 2 March, and developments since then have, in our view, further undermined Russia's willingness to service government debt," the agency said.

"The further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective non-payment of its sovereign debt obligations," it added.

On Sunday, Moscow assured investors that it would continue to service its sovereign debt.

However, it warned that international sanctions imposed on its energy industry could limit its ability and willingness to meet its obligations.

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"The actual possibility of making such payments to non-residents will depend on the limiting measures introduced by foreign states in relation to the Russian Federation," the finance ministry said in a statement.

In recent days, rival ratings agencies Moody's Investors Service and S&amp;P Global Ratings have also slashed their assessments of Russian sovereign debt.

Meanwhile, Russia’s ruble has hit a record low of more than 10 per cent since Friday, closing it at 137 against a dollar.

Also read |&nbsp;<a href="https://www.wionews.com/photos/how-ukraines-punisher-drone-is-targeting-russian-supply-lines-460230">How Ukraine's 'Punisher' drone is targeting Russian supply lines</a>

The reason behind this latest fall is reported to be the inability of traders to buy and sell the Russian currency, which has become more limited as fewer banks want to settle transactions against it in the offshore market.

As per a&nbsp;Reuters&nbsp;report,&nbsp;Russian markets are expected to remain closed for trading until at least Wednesday.

(With inputs from agencies)

International rating agency Fitch has downgraded Russia’s sovereign rating, warning a default is "imminent". It has downgraded Russia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘C’ from ‘B’.

International rating agency Fitch has downgraded Russia’s sovereign rating, warning a default is "imminent". It has downgraded Russia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘C’ from ‘B’. It means that Russia will soon be unable to pay its debts. A low rating means the chances of not getting repaid is considered to be high - and so an investor will charge more to lend to that country. The move comes amid increasing international sanctions against Russia in the wake of the invasion of Ukraine. "This rating action follows our downgrade... on 2 March, and developments since then have, in our view, further undermined Russia's willingness to service government debt," the agency said. "The further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective non-payment of its sovereign debt obligations," it added. On Sunday, Moscow assured investors that it would continue to service its sovereign debt. However, it warned that international sanctions imposed on its energy industry could limit its ability and willingness to meet its obligations. Also read | European Union adds 160 Russian oligarchs, senators to sanctions blacklist "The actual possibility of making such payments to non-residents will depend on the limiting measures introduced by foreign states in relation to the Russian Federation," the finance ministry said in a statement. In recent days, rival ratings agencies Moody's Investors Service and S&P Global Ratings have also slashed their assessments of Russian sovereign debt. Meanwhile, Russia’s ruble has hit a record low of more than 10 per cent since Friday, closing it at 137 against a dollar. Also read | How Ukraine's 'Punisher' drone is targeting Russian supply lines The reason behind this latest fall is reported to be the inability of traders to buy and sell the Russian currency, which has become more limited as fewer banks want to settle transactions against it in the offshore market. As per a Reuters report, Russian markets are expected to remain closed for trading until at least Wednesday. (With inputs from agencies)

Fitch downgrades Russia’s sovereign rating, says default ‘imminent’

Kyrgyzstan has borrowed $1.8 billion from China's Export-Import Bank. There are concerns if Kyrgyzstan can pay back these loans. Is Kyrgyzstan caught in China's debt trap? Palki Sharma brings you an exclusive conversation with former Kyrgyz PM Djoomart Otorbaev.

Gravitas: Exclusive: Is Central Asia the new victim of China's debt trap?

Cash-strapped&nbsp;Sri&nbsp;Lanka&nbsp;sought to&nbsp;reschedule&nbsp;its huge&nbsp;Chinese&nbsp;debt&nbsp;burden in Sunday talks with visiting foreign minister Wang Yi, the president's office said.

The island's tourism-dependent&nbsp;economy&nbsp;has been hammered by the pandemic and its depleted foreign exchange reserves have led to food rationing at supermarkets and shortages of essential goods.

Key ally China is&nbsp;Sri&nbsp;Lanka's biggest bilateral lender and Wang's visit comes after a warning from international ratings agencies that President Gotabaya Rajapaksa's government could be on the brink of default.

"The President pointed out that it would be a great relief if&nbsp;debt&nbsp;payments could be rescheduled in view of the&nbsp;economic crisis&nbsp;following the pandemic," Rajapaksa's office said in a statement.

There was no immediate comment from the&nbsp;Chinese&nbsp;embassy in Colombo.

<a href="https://www.wionews.com/south-asia/chinese-foreign-minister-wang-yi-reaches-sri-lanka-for-two-day-visit-443289">Also read |&nbsp;Chinese Foreign Minister Wang Yi reaches Sri Lanka for two-day visit</a>

Sri&nbsp;Lanka's foreign reserves had dropped to just $1.5 billion at the end of November &nbsp;-- enough to pay for only about a month's worth of imports.

The island's main energy utility began rationing electricity on Friday after running out of foreign&nbsp;currency&nbsp;to import oil for its thermal generators.

China accounted for about 10 percent of&nbsp;Sri&nbsp;Lanka's $35 billion foreign&nbsp;debt&nbsp;to April 2021, government data shows.

Officials said China's total lending could be much higher when taking into account loans to state-owned enterprises and the central bank.

Sri&nbsp;Lanka&nbsp;has borrowed heavily from China for infrastructure, some of which ended up as white elephants.

Unable to repay a $1.4 billion loan for a port construction in southern&nbsp;Sri&nbsp;Lanka, Colombo was forced to lease out the facility to a&nbsp;Chinese&nbsp;company for 99 years in 2017.

<a href="https://www.wionews.com/south-asia/due-to-covid-19-sri-lanka-faces-economic-crisis-and-high-food-inflation-441955">Also read |&nbsp;Due to COVID-19, Sri Lanka faces economic crisis and high food inflation</a>

The United States and India warned that the Hambantota port, located along vital east-west international shipping routes, could give China a military toehold in the Indian Ocean.

Both Colombo and Beijing have denied that&nbsp;Sri&nbsp;Lankan ports will be used for any military purposes.

Wang arrived in&nbsp;Sri&nbsp;Lanka&nbsp;on Saturday night after visiting the nearby Maldives, in the final leg of his first foreign tour of 2022 which has also taken him to Eritrea, Kenya and the Comoros.

China offered the Maldives infrastructure maintenance, medical aid and visa concessions as Beijing moved to strengthen its connections with the strategically placed archipelago.

Cash-strapped Sri Lanka sought to reschedule its huge Chinese debt burden in Sunday talks with visiting foreign minister Wang Yi, the president's office said. The island's tourism-dependent economy has been hammered by the pandemic and its depleted foreign exchange reserves have led to food rationing at supermarkets and shortages of essential goods.

Cash-strapped Sri Lanka sought to reschedule its huge Chinese debt burden in Sunday talks with visiting foreign minister Wang Yi, the president's office said. The island's tourism-dependent economy has been hammered by the pandemic and its depleted foreign exchange reserves have led to food rationing at supermarkets and shortages of essential goods. Key ally China is Sri Lanka's biggest bilateral lender and Wang's visit comes after a warning from international ratings agencies that President Gotabaya Rajapaksa's government could be on the brink of default. "The President pointed out that it would be a great relief if debt payments could be rescheduled in view of the economic crisis following the pandemic," Rajapaksa's office said in a statement. There was no immediate comment from the Chinese embassy in Colombo. Also read | Chinese Foreign Minister Wang Yi reaches Sri Lanka for two-day visit Sri Lanka's foreign reserves had dropped to just $1.5 billion at the end of November -- enough to pay for only about a month's worth of imports. The island's main energy utility began rationing electricity on Friday after running out of foreign currency to import oil for its thermal generators. China accounted for about 10 percent of Sri Lanka's $35 billion foreign debt to April 2021, government data shows. Officials said China's total lending could be much higher when taking into account loans to state-owned enterprises and the central bank. Sri Lanka has borrowed heavily from China for infrastructure, some of which ended up as white elephants. Unable to repay a $1.4 billion loan for a port construction in southern Sri Lanka, Colombo was forced to lease out the facility to a Chinese company for 99 years in 2017. Also read | Due to COVID-19, Sri Lanka faces economic crisis and high food inflation The United States and India warned that the Hambantota port, located along vital east-west international shipping routes, could give China a military toehold in the Indian Ocean. Both Colombo and Beijing have denied that Sri Lankan ports will be used for any military purposes. Wang arrived in Sri Lanka on Saturday night after visiting the nearby Maldives, in the final leg of his first foreign tour of 2022 which has also taken him to Eritrea, Kenya and the Comoros. China offered the Maldives infrastructure maintenance, medical aid and visa concessions as Beijing moved to strengthen its connections with the strategically placed archipelago.

Sri Lanka seeks Chinese debt reschedule amid economic crisis

China Evergrande Group has set up a risk management committee as the cash-strapped property developer inches closer to a debt restructuring that has loomed for months over global markets. The group shares were up by 7% in early trading.

China's Evergrande shares up over 7%, inching towards debt restructuring

Shares of China&nbsp;Evergrande&nbsp;Group tumbled 12% to an 11-year low on Monday after the firm said there was no guarantee it would have enough funds to meet debt repayments, prompting Chinese authorities to summon its chairman.

The shares fell as a 30-day grace period on a coupon payment of $82.5 million due on Nov. 6 comes to an end on Monday.

Evergrande, once China's top-selling developer, is grappling with more than $300 billion in liabilities. A collapse could send shockwaves through the country's property sector and beyond.

<a href="https://www.wionews.com/world/embattled-chinese-firm-evergrande-meets-deadline-again-avoids-default-428368">Also read |&nbsp;Embattled Chinese firm, Evergrande, meets deadline again; avoids default</a>

In a filing late on Friday,&nbsp;Evergrande, the world's most indebted developer, also said it had received a demand from creditors to pay about $260 million.

That prompted the government of Guangdong province, where the company is based, to summon&nbsp;Evergrande&nbsp;Chairman Hui Ka Yan, and it later said in a statement it would send a working group to the developer at&nbsp;Evergrande's request to oversee risk management, strengthen internal controls and maintain normal operations.

<a href="https://www.wionews.com/business-economy/evergrande-makes-crucial-interest-payment-report-425156">Also read |&nbsp;Evergrande makes crucial interest payment: Report</a>

In a series of apparently coordinated statements late in the evening, China's central bank, banking and insurance regulator and its securities regulator sought to reassure the market that any risks to the broader property sector could be contained.

Short-term risks caused by a single real estate firm will not undermine market fundraising in the medium and long term, the People's Bank of China said, adding that housing sales, land purchases and financing "have already returned to normal in China".

Evergraned's stock fell more than 12% to HK$1.98, its lowest since May 2010.

Shares of China Evergrande Group tumbled 12% to an 11-year low on Monday after the firm said there was no guarantee it would have enough funds to meet debt repayments, prompting Chinese authorities to summon its chairman.

Shares of China Evergrande Group tumbled 12% to an 11-year low on Monday after the firm said there was no guarantee it would have enough funds to meet debt repayments, prompting Chinese authorities to summon its chairman. The shares fell as a 30-day grace period on a coupon payment of $82.5 million due on Nov. 6 comes to an end on Monday. Evergrande, once China's top-selling developer, is grappling with more than $300 billion in liabilities. A collapse could send shockwaves through the country's property sector and beyond. Also read | Embattled Chinese firm, Evergrande, meets deadline again; avoids default In a filing late on Friday, Evergrande, the world's most indebted developer, also said it had received a demand from creditors to pay about $260 million. That prompted the government of Guangdong province, where the company is based, to summon Evergrande Chairman Hui Ka Yan, and it later said in a statement it would send a working group to the developer at Evergrande's request to oversee risk management, strengthen internal controls and maintain normal operations. Also read | Evergrande makes crucial interest payment: Report In a series of apparently coordinated statements late in the evening, China's central bank, banking and insurance regulator and its securities regulator sought to reassure the market that any risks to the broader property sector could be contained. Short-term risks caused by a single real estate firm will not undermine market fundraising in the medium and long term, the People's Bank of China said, adding that housing sales, land purchases and financing "have already returned to normal in China". Evergraned's stock fell more than 12% to HK$1.98, its lowest since May 2010.

Embattled Chinese firm, Evergrande, braces for debt deadline

The Belt and Road initiative faces a new challenger. Is EU's "Global Gateway" a viable alternative to counter Chinese debt traps? Can democracies unite to dismantle Chinese colonies worldwide? Palki Sharma brings you an assessment.

Gravitas: Europe wants to neutralise Chinese debt traps

Kaisa and three of its units had their shares suspended from trading on Friday, a day after an affiliate missed a payment to onshore investors as China's snowballing property debt crisis jolts other developers.

World Business Watch: Kaisa, units trading suspended as debt crisis routs Chinese developers' shares

Jubilee Debt Campaign&nbsp;has found that lower-income countries spend approximately five times more on debt than they spend coping with the effects of climate change and reducing carbon emissions.

The charity's figures show that 34 of the world's poorest countries spend $29.4 billion a year on debt repayments, compared with $5.4 billion (£3.9 billion) spent on climate change measures.

Also Read |&nbsp;<a href="https://www.wionews.com/world/75-of-europeans-are-more-concerned-about-the-climate-crisis-than-their-governments-survey-424428">75% of Europeans are more concerned about the climate crisis than their governments: Survey</a>

Africa's largest country Uganda has pledged that it would spend $537million between 2016 and 2020 ($107.4 million annually) on climate-related projects to adapt its infrastructure and handle climate emergencies. This includes funds from international agencies and donors.

However, the budget of $107.4 million is dwarfed by the external debt payments of $739 million in 2021, which will rise to $1.35 billion in 2025.

According to the charity, Uganda is not the only low-income country that will have to find extra cash to pay debt interest over the next four years. Jubilee Debt Campaign estimates 34 countries covered by its research will spend seven times more on debt payments in 2025 than limiting the effects of climate change.

Also Read |&nbsp;<a href="https://www.wionews.com/world/explainer-sticking-points-at-the-un-climate-conference-424447">Explainer | Sticking points at the UN climate conference</a>

Heidi Chow, executive director of the Jubilee Debt Campaign, says that lower-income countries will discuss the implications of this outstanding debt on their ability to combat climate change at the upcoming COP26 meeting.

She says it's troubling that lower-income countries are repaying billions of dollars in debt to rich countries, banks, and international financial institutions at a time when those resources are desperately needed to combat climate change.

Chow added that wealthy polluting nations need to stop shirking their responsibilities and provide climate financing through grants and cancellation of debts.

Also read |&nbsp;<a href="https://www.wionews.com/world/on-current-climate-plans-world-faces-27c-temperature-rise-warns-un-424453" hreflang="en">On current climate plans, world faces 2.7C temperature rise, warns UN</a>

Over the last two decades, a number of international organizations, including the World Bank and the International Monetary Fund (IMF) have encouraged developing countries to use bank loans and bonds to fund development projects.

With regular repayments, the borrower expected interest rates to fall over time. Yet low-income countries routinely pay more than 10 per cent interest on loans compared to rich countries, which pay an average of 1.5 to 2.5 per cent.

During the pandemic, the IMF provided insurance to lower the debt interest payments of low-income countries, but this did not cover Chinese debts.

Rich countries were supposed to provide $100bn a year in funding to reduce climate change under an agreement made at the UN climate talks in Copenhagen in 2009.&nbsp;

Watch |&nbsp;UN sounds alarm on climate crisis ahead of high stakes COP26 summit

<iframe allowfullscreen="" autoplay="1" frameborder="0" height="350" src="https://www.wionews.com/videos/un-sounds-alarm-on-climate-crisis-ahead-of-high-stakes-cop26-summit-424362/embed" width="560"></iframe>

Ahead of Cop26, UK cabinet minister Alok Sharma expressed confidence that the target would be met by 2023.

However, according to Jubilee Debt Campaign, over two-thirds of the climate finance given so far has been in the form of loans, further aggravating the debt crisis in lower-income countries.

Jubilee Debt Campaign has found that lower-income countries spend approximately five times more on debt than they spend coping with the effects of climate change and reducing carbon emissions.

Jubilee Debt Campaign has found that lower-income countries spend approximately five times more on debt than they spend coping with the effects of climate change and reducing carbon emissions. The charity's figures show that 34 of the world's poorest countries spend $29.4 billion a year on debt repayments, compared with $5.4 billion (£3.9 billion) spent on climate change measures. Also Read | 75% of Europeans are more concerned about the climate crisis than their governments: Survey Africa's largest country Uganda has pledged that it would spend $537million between 2016 and 2020 ($107.4 million annually) on climate-related projects to adapt its infrastructure and handle climate emergencies. This includes funds from international agencies and donors. However, the budget of $107.4 million is dwarfed by the external debt payments of $739 million in 2021, which will rise to $1.35 billion in 2025. According to the charity, Uganda is not the only low-income country that will have to find extra cash to pay debt interest over the next four years. Jubilee Debt Campaign estimates 34 countries covered by its research will spend seven times more on debt payments in 2025 than limiting the effects of climate change. Also Read | Explainer | Sticking points at the UN climate conference Heidi Chow, executive director of the Jubilee Debt Campaign, says that lower-income countries will discuss the implications of this outstanding debt on their ability to combat climate change at the upcoming COP26 meeting. She says it's troubling that lower-income countries are repaying billions of dollars in debt to rich countries, banks, and international financial institutions at a time when those resources are desperately needed to combat climate change. Chow added that wealthy polluting nations need to stop shirking their responsibilities and provide climate financing through grants and cancellation of debts. Also read | On current climate plans, world faces 2.7C temperature rise, warns UN Over the last two decades, a number of international organizations, including the World Bank and the International Monetary Fund (IMF) have encouraged developing countries to use bank loans and bonds to fund development projects. With regular repayments, the borrower expected interest rates to fall over time. Yet low-income countries routinely pay more than 10 per cent interest on loans compared to rich countries, which pay an average of 1.5 to 2.5 per cent. During the pandemic, the IMF provided insurance to lower the debt interest payments of low-income countries, but this did not cover Chinese debts. Rich countries were supposed to provide $100bn a year in funding to reduce climate change under an agreement made at the UN climate talks in Copenhagen in 2009. Watch | UN sounds alarm on climate crisis ahead of high stakes COP26 summit Ahead of Cop26, UK cabinet minister Alok Sharma expressed confidence that the target would be met by 2023. However, according to Jubilee Debt Campaign, over two-thirds of the climate finance given so far has been in the form of loans, further aggravating the debt crisis in lower-income countries.

Poor nations to spend five times as much on debt as they do against climate change: Report

According to the report by leading anti poverty charity group poor countries spend five times more debt than coping with impact of climate change.

The report comes ahead of the COP26 climate summit that is scheduled to take place from 31 October 2021 to 12 November 2021 in Glasgow, Scotland, to discuss about the countries commitment to slow down climate change and keep global warming to 1.5 degrees Celsius.

Also Read |&nbsp;<a href="https://www.wionews.com/world/75-of-europeans-are-more-concerned-about-the-climate-crisis-than-their-governments-survey-424428">75% of Europeans are more concerned about the climate crisis than their governments: Survey</a>

Reports claim that 34 of the world's poorest countries are spending $29.4billion on debt payments a year compared with $5.4billion to cope with the impact of the climate change.

Uganda spend $537million between 2016 and 2020 on climate related projects. However spent $107.4million annual debt in 2021,reports said.

Watch |&nbsp;UN sounds alarm on climate crisis ahead of high stakes COP26 summit

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Uganda is not the only low income country according to report there are 34 more countries spend seven time more debt than coping with impact of climate change.

Also Read |&nbsp;<a href="https://www.wionews.com/world/explainer-sticking-points-at-the-un-climate-conference-424447">Explainer | Sticking points at the UN climate conference</a>

When resources are desperately needed to fight the climate crisis, low-income countries are giving billions of dollars to rich countries, banks and international financial institutions to repay loans.

In the UN climate talks in Copenhagen in 2009, rich countries had commited providing funding worth $100billion a year to developing countries to help deal with climate change.

Study shows Earth's brightness is dropping and there are many who have lost their homes and loved ones because of drought, flood or storms&nbsp;caused by climate change.

Earlier this month, British COP26 president Alok Sharma described a forthcoming UN report about climate change in stark terms; as offering the international community its clearest warning about the risks of accelerating climate change.

According to the report by leading anti poverty charity group poor countries spend five times more debt than coping with impact of climate change. The report comes ahead of the COP26 climate summit that is scheduled to take place from 31 October 2021 to 12 November 2021 in Glasgow, Scotland, to discuss about the countries commitment to slow down climate change and keep global warming to 1.

According to the report by leading anti poverty charity group poor countries spend five times more debt than coping with impact of climate change. The report comes ahead of the COP26 climate summit that is scheduled to take place from 31 October 2021 to 12 November 2021 in Glasgow, Scotland, to discuss about the countries commitment to slow down climate change and keep global warming to 1.5 degrees Celsius. Also Read | 75% of Europeans are more concerned about the climate crisis than their governments: Survey Reports claim that 34 of the world's poorest countries are spending $29.4billion on debt payments a year compared with $5.4billion to cope with the impact of the climate change. Uganda spend $537million between 2016 and 2020 on climate related projects. However spent $107.4million annual debt in 2021,reports said. Watch | UN sounds alarm on climate crisis ahead of high stakes COP26 summit Uganda is not the only low income country according to report there are 34 more countries spend seven time more debt than coping with impact of climate change. Also Read | Explainer | Sticking points at the UN climate conference When resources are desperately needed to fight the climate crisis, low-income countries are giving billions of dollars to rich countries, banks and international financial institutions to repay loans. In the UN climate talks in Copenhagen in 2009, rich countries had commited providing funding worth $100billion a year to developing countries to help deal with climate change. Study shows Earth's brightness is dropping and there are many who have lost their homes and loved ones because of drought, flood or storms caused by climate change. Earlier this month, British COP26 president Alok Sharma described a forthcoming UN report about climate change in stark terms; as offering the international community its clearest warning about the risks of accelerating climate change.

Poorer countries spend five times more on debt than climate crisis – report

The crisis at Evergrande rattled the global markets and triggered a series of defaults within China's real estate sector. But, the hidden debt of local governments poses a much bigger threat to the Chinese economy. Palki Sharma tells you more about China's $8 trillion debt time bomb.

Gravitas: A $8 trillion debt time bomb that China hid

Almost eight million British shoppers who utilised 'buy now, pay later' (BNPL) services had outstanding amounts of £538 ($740) on average, totaling £4.14 billion ($5.49 billion) in the UK.

According to Credit Karma research, over half (48%) of BNPL purchases are for non-essential things like gadgets, cosmetics, or vacations, and 31% of Brits plan to use the service more as the Christmas season approaches.

But BNPL debt could be impacting consumers' credit score and ability to get a mortgage.&nbsp;

Customers may stagger payments for things like clothes, footwear, cosmetic items, and furniture with no interest or fees if they pay what they owe on time, according to a rising number of firms including Klarna, Clearpay, and Laybuy.

Hundreds of online stores, like Asos, H&amp;M, Boohoo, and JD Sports, offer the option to buy now and pay in three monthly or six weekly instalments.

According to official figures, the usage of BNPL in the UK nearly doubled in 2020, reaching £2.7 billion in transactions.

According to a Financial Conduct Authority study, 5 million consumers utilised a BNPL product between the start of the epidemic and the end of last year.&nbsp;

(With inputs from agencies)

Almost eight million British shoppers who utilised 'buy now, pay later' (BNPL) services had outstanding amounts of £538 ($740) on average, totaling £4.14 billion ($5.

Almost eight million British shoppers who utilised 'buy now, pay later' (BNPL) services had outstanding amounts of £538 ($740) on average, totaling £4.14 billion ($5.49 billion) in the UK. According to Credit Karma research, over half (48%) of BNPL purchases are for non-essential things like gadgets, cosmetics, or vacations, and 31% of Brits plan to use the service more as the Christmas season approaches. But BNPL debt could be impacting consumers' credit score and ability to get a mortgage. Customers may stagger payments for things like clothes, footwear, cosmetic items, and furniture with no interest or fees if they pay what they owe on time, according to a rising number of firms including Klarna, Clearpay, and Laybuy. Hundreds of online stores, like Asos, H&M, Boohoo, and JD Sports, offer the option to buy now and pay in three monthly or six weekly instalments. According to official figures, the usage of BNPL in the UK nearly doubled in 2020, reaching £2.7 billion in transactions. According to a Financial Conduct Authority study, 5 million consumers utilised a BNPL product between the start of the epidemic and the end of last year. (With inputs from agencies)

Britishers in debt of more than $5.49 billion for ‘buy now, pay later’ services

As the crisis at Evergrande continues, 3 more real estate developers have defaulted on their debt obligations in China. But, that is just the tip of the iceberg. Local governments in China could be hiding a $4 trillion "debt bomb". Palki Sharma tells you more.

Gravitas: China's hidden $4 trillion debt bomb

The US Senate approved legislation to temporarily raise the federal government's $28.4 trillion debt limit and avoid the risk of a historic default this month.

US Senate approves debt limit hike to avoid default

Less than two weeks before it was due to be reached, senators in the United States have voted to temporarily extend the country's debt ceiling. Chuck Schumer, who leads the Democrats in the Senate, announced the breakthrough deal after negotiations in Congress during the early hours of the morning.

Less than two weeks before it was due to be reached, senators in the United States have voted to temporarily extend the country's debt ceiling. Chuck Schumer, who leads the Democrats in the Senate, announced the breakthrough deal after negotiations in Congress during the early hours of the morning. "Republicans played a dangerous and risky partisan game, and I am glad that their brinksmanship did not work," he said on the Senate floor. Republican Senate minority leader Mitch McConnell offered the deal on Wednesday as his party was set to vote against House-passed democratic plans. The temporary measure raises the US debt ceiling to $480 billion. Schumer further said, "What is needed now is a long-term solution so we don't go through this risky drama every few months, and we hope Republicans will join in enacting a long term solution to the debt limit in December." "We are ready to work with them." Also read | Republicans continue withholding support to US debt ceiling increase The United States spends more money than it collects through taxation. Therefore, it borrows money through issuing government bonds. This is considered the world's most reliable investment. In 1939, Congress established an aggregate limit or what you call as 'ceiling' on how much debt the government can accumulate. However, it has been lifted dozens of times to allow the government to meet its spending commitments. This time, few Republicans voiced frustration around new spending proposals that Democrats were trying to push through. The Democrats highlighted that raising the debt ceiling is about paying off existing obligations rather than paying for new ones. Also, they mentioned that President Joe Biden's policies have only contributed to 3 per cent of existing debts. McConnell, since July, had been insisting that Democrats suspend the debt limit with no Republican help.

US Senate votes to temporarily extend debt ceiling

China and Pakistan have signed a precursor deal to develop the Karachi coastline. Beijing is expected to invest $3.5 billion in what is being called another debt trap. What does this deal mean for the Gwadar port? Palki Sharma tells you.

Gravitas: China's new debt trap: Karachi port

Chinese drones are falling from the sky. Chinese realtors are going broke. But Xi Jinping is only concerned about his expansionist mission in Taiwan. Is a Chinese invasion imminent? What can the US do to bolster Taiwan? Palki Sharma tells you.

Gravitas: Crashing drones, rising debt: China's rough patch

In two weeks, America could default on its debt for the first time in history. President Joe Biden has called it a 'meteor headed for the US economy'. Are Republicans using the recession as leverage? Is Biden's bipartisanship claim a sham? Palki Sharma tells you.

Gravitas: Biden blames Republicans for looming credit default

Another Chinese homebuilder has hit financial trouble after it missed payments on debt obligations, adding to worries over the country's property sector as embattled giant China Evergrande teeters on the brink of collapse.

Fears of contagion through the Chinese economy have grown as Evergrande, the most indebted of the country's private homebuilders, struggles with more than $300 billion in liabilities and heads towards a massive restructuring.

Fantasia Holdings failed to repay a $205.7 million note Monday, the Shenzhen-based company said in a statement.

This came as property management firm Country Garden Services Holdings added that a unit of Fantasia had missed repayment on a 700 million yuan ($108 million) loan, saying it was likely Fantasia would default.

The news comes as investors await news from Evergrande after it suspended trading of its shares Monday pending an announcement on a "major transaction", with reports saying Hong Kong real estate firm Hopson Development Holdings planned to buy a 51 percent stake in its property services arm.

While Fantasia is a smaller player in the market than Evergrande, its struggles highlight investor concerns over companies' financial disclosures.

Fitch Ratings downgraded Fantasia to "CCC-" on Monday, a move that points to default as a possibility.

The ratings agency added in a statement that although media reports said Fantasia missed an earlier payment to bondholders, the bond "does not appear to have been disclosed in the company's financial reports".

"We believe the existence of these bonds means that the company's liquidity situation could be tighter than we previously expected.

"Furthermore, this incident casts doubt on the transparency of the company's financial disclosures," Fitch added.

Separately, S&amp;P Global Ratings has downgraded another Chinese property firm -- Sinic Holdings -- saying its "debt-servicing ability has almost been depleted".

Sinic has been unable to service interest repayments, which could result in "accelerating repayments on Sinic's other debt obligations", S&amp;P said on Monday.

Fitch downgraded Sinic from "CCC" to "C" on Tuesday, reflecting its view that "a default-like process has begun" for the company.

The boss of Shanghai-based Sinic hit the headlines last month when he lost more than a billion dollars in a market meltdown linked to fears about Evergrande.

Zhang Yuanlin saw his net worth drop from $1.3 billion to $250.7 million on September 20, according to Forbes, when his firm was forced to halt trading in Hong Kong following an 87 percent slump in its share price.

China's real-estate sector has been under tightened scrutiny in recent months, with regulators announcing caps for three different debt ratios in a scheme dubbed "three red lines" last year.

Beijing has stayed silent on the travails of Evergrande, but state media has trailed various responses in a nod to the mood towards a private company that grew on a debt binge in the boom years of Chinese real estate.

Another Chinese homebuilder has hit financial trouble after it missed payments on debt obligations, adding to worries over the country's property sector as embattled giant China Evergrande teeters on the brink of collapse.

Another Chinese homebuilder has hit financial trouble after it missed payments on debt obligations, adding to worries over the country's property sector as embattled giant China Evergrande teeters on the brink of collapse. Fears of contagion through the Chinese economy have grown as Evergrande, the most indebted of the country's private homebuilders, struggles with more than $300 billion in liabilities and heads towards a massive restructuring. Fantasia Holdings failed to repay a $205.7 million note Monday, the Shenzhen-based company said in a statement. This came as property management firm Country Garden Services Holdings added that a unit of Fantasia had missed repayment on a 700 million yuan ($108 million) loan, saying it was likely Fantasia would default. The news comes as investors await news from Evergrande after it suspended trading of its shares Monday pending an announcement on a "major transaction", with reports saying Hong Kong real estate firm Hopson Development Holdings planned to buy a 51 percent stake in its property services arm. While Fantasia is a smaller player in the market than Evergrande, its struggles highlight investor concerns over companies' financial disclosures. Fitch Ratings downgraded Fantasia to "CCC-" on Monday, a move that points to default as a possibility. The ratings agency added in a statement that although media reports said Fantasia missed an earlier payment to bondholders, the bond "does not appear to have been disclosed in the company's financial reports". "We believe the existence of these bonds means that the company's liquidity situation could be tighter than we previously expected. "Furthermore, this incident casts doubt on the transparency of the company's financial disclosures," Fitch added. Separately, S&P Global Ratings has downgraded another Chinese property firm -- Sinic Holdings -- saying its "debt-servicing ability has almost been depleted". Sinic has been unable to service interest repayments, which could result in "accelerating repayments on Sinic's other debt obligations", S&P said on Monday. Fitch downgraded Sinic from "CCC" to "C" on Tuesday, reflecting its view that "a default-like process has begun" for the company. The boss of Shanghai-based Sinic hit the headlines last month when he lost more than a billion dollars in a market meltdown linked to fears about Evergrande. Zhang Yuanlin saw his net worth drop from $1.3 billion to $250.7 million on September 20, according to Forbes, when his firm was forced to halt trading in Hong Kong following an 87 percent slump in its share price. China's real-estate sector has been under tightened scrutiny in recent months, with regulators announcing caps for three different debt ratios in a scheme dubbed "three red lines" last year. Beijing has stayed silent on the travails of Evergrande, but state media has trailed various responses in a nod to the mood towards a private company that grew on a debt binge in the boom years of Chinese real estate.

Chinese developer Fantasia fails to make debt payments

New York City has an opportunity to solve a debt crisis that has devastated a central institution in the lives of many New Yorkers: yellow cabs and their owner-drivers. The solution would come at a relatively modest cost and would help redress an injustice from which the city benefited financially: a creditor-driven bubble in the price of medallions — the permits that allow people to operate cabs — that led many drivers into debt bondage and even prompted some to commit suicide.

The city should take action. It should adopt a plan put forward last year by the New York Taxi Workers Alliance in which the drivers’ debt would be restructured and the city would serve as the guarantor of the medallions’ value.

There are about 12,000 taxi medallions in use in New York, sold originally by the city but now traded mostly among taxi drivers and owners of taxi fleets. Medallion brokers often arrange for sales and their financing. As investigative reporting has shown, for about a decade a creditor-driven cycle of easy credit rapidly increased the price of a medallion, which reached almost $1 million in 2014, the peak year.

Cabdrivers, typically immigrants, took out loans to pay for the medallions, and to obtain the loans they often had to offer as collateral everything that they and their next of kin owned. When in 2019 the bubble burst and the value of a medallion dropped to about $100,000, cabdrivers were plunged into financial ruin.

Identifying a debt bubble in real time is not always easy. But with the market for taxi medallions, creditors, brokers and the city were in a position to see what was going on — and yet they allowed the frenzy to continue and often made large sums of money from it.

The plan put forward by the Taxi Workers Alliance was devised after consultation with cabdrivers, some of the creditors and some city officials. (Two of the alliance’s lawyers are former students of mine.) Under the plan, New York City would become the guarantor of the medallions’ value. If the cabdrivers default on the loan, the city, not the personal assets of drivers and their families, would guarantee the value.

For creditors this would be a boon as well, because a guarantee from New York is a more reliable security than are personal assets. In return, the creditors would agree to restructure the loans to reflect the actual market value of the medallions, not their inflated “bubble” value.

The cost to the city would be $93 million over 30 years, based on estimated default rates and the prevailing market value of the medallions published by the city’s Taxi and Limousine Commission. This is a relatively small price, especially considering that from 2004 to 2017, the city made more than $850 million from auctioning new medallions.

The alliance’s plan is superior to a plan being considered by the Taxi and Limousine Commission, which would offer each driver a one-time grant of $20,000 to pay off creditors. That would be good news for the creditors, but it would leave the cabdrivers to renegotiate the rest of their debt on their own.

Some will object that the city should not get involved in a private contractual relationship between a debtor and a creditor. But the city is already involved: It created the asset at the center of the deals — the medallion. In addition, as the city made money from the inflated price of medallions, it allowed the bubble to run its course, ignoring lessons from the similar bubble in the housing market a few years earlier. By adopting the alliance plan, the city would help right a wrong that, at least indirectly, it helped create.

Another objection to the plan is that the drivers are to blame for their fate — after all, they chose to sign the loan contracts — and that government intervention will just make things worse because people will come to expect bailouts in the future and behave recklessly as a result. But lender-borrower relationships are never entered into equally: Whoever has the money can set the terms — whether to lend at all, for what purposes and on what conditions. Unfortunately, the law ignores this power imbalance. Contracting parties are treated as equal with each party fully responsible for upholding its side of the bargain.

Even if the creditors who provided the loans to buy the medallions played by the formal rules of the game — a big “if,” in many cases — they still took their debtors for a ride. Their lending practices shifted most of the risk of the deal to the debtors, who were least able to carry it.

Though it did not directly subsidize creditors, New York City allowed them to enrich themselves by exploiting the weaknesses of others — while itself profiting handsomely. By adopting the plan put forward by the cabdrivers’ alliance, the city would mitigate a harm it helped inflict on a group of people who have always helped fuel the fortunes of this city.

New York City has an opportunity to solve a debt crisis that has devastated a central institution in the lives of many New Yorkers: yellow cabs and their owner-drivers.

New York City has an opportunity to solve a debt crisis that has devastated a central institution in the lives of many New Yorkers: yellow cabs and their owner-drivers. The solution would come at a relatively modest cost and would help redress an injustice from which the city benefited financially: a creditor-driven bubble in the price of medallions — the permits that allow people to operate cabs — that led many drivers into debt bondage and even prompted some to commit suicide. The city should take action. It should adopt a plan put forward last year by the New York Taxi Workers Alliance in which the drivers’ debt would be restructured and the city would serve as the guarantor of the medallions’ value. There are about 12,000 taxi medallions in use in New York, sold originally by the city but now traded mostly among taxi drivers and owners of taxi fleets. Medallion brokers often arrange for sales and their financing. As investigative reporting has shown, for about a decade a creditor-driven cycle of easy credit rapidly increased the price of a medallion, which reached almost $1 million in 2014, the peak year. Cabdrivers, typically immigrants, took out loans to pay for the medallions, and to obtain the loans they often had to offer as collateral everything that they and their next of kin owned. When in 2019 the bubble burst and the value of a medallion dropped to about $100,000, cabdrivers were plunged into financial ruin. Identifying a debt bubble in real time is not always easy. But with the market for taxi medallions, creditors, brokers and the city were in a position to see what was going on — and yet they allowed the frenzy to continue and often made large sums of money from it. The plan put forward by the Taxi Workers Alliance was devised after consultation with cabdrivers, some of the creditors and some city officials. (Two of the alliance’s lawyers are former students of mine.) Under the plan, New York City would become the guarantor of the medallions’ value. If the cabdrivers default on the loan, the city, not the personal assets of drivers and their families, would guarantee the value. For creditors this would be a boon as well, because a guarantee from New York is a more reliable security than are personal assets. In return, the creditors would agree to restructure the loans to reflect the actual market value of the medallions, not their inflated “bubble” value. The cost to the city would be $93 million over 30 years, based on estimated default rates and the prevailing market value of the medallions published by the city’s Taxi and Limousine Commission. This is a relatively small price, especially considering that from 2004 to 2017, the city made more than $850 million from auctioning new medallions. The alliance’s plan is superior to a plan being considered by the Taxi and Limousine Commission, which would offer each driver a one-time grant of $20,000 to pay off creditors. That would be good news for the creditors, but it would leave the cabdrivers to renegotiate the rest of their debt on their own. Some will object that the city should not get involved in a private contractual relationship between a debtor and a creditor. But the city is already involved: It created the asset at the center of the deals — the medallion. In addition, as the city made money from the inflated price of medallions, it allowed the bubble to run its course, ignoring lessons from the similar bubble in the housing market a few years earlier. By adopting the alliance plan, the city would help right a wrong that, at least indirectly, it helped create. Another objection to the plan is that the drivers are to blame for their fate — after all, they chose to sign the loan contracts — and that government intervention will just make things worse because people will come to expect bailouts in the future and behave recklessly as a result. But lender-borrower relationships are never entered into equally: Whoever has the money can set the terms — whether to lend at all, for what purposes and on what conditions. Unfortunately, the law ignores this power imbalance. Contracting parties are treated as equal with each party fully responsible for upholding its side of the bargain. Even if the creditors who provided the loans to buy the medallions played by the formal rules of the game — a big “if,” in many cases — they still took their debtors for a ride. Their lending practices shifted most of the risk of the deal to the debtors, who were least able to carry it. Though it did not directly subsidize creditors, New York City allowed them to enrich themselves by exploiting the weaknesses of others — while itself profiting handsomely. By adopting the plan put forward by the cabdrivers’ alliance, the city would mitigate a harm it helped inflict on a group of people who have always helped fuel the fortunes of this city.

How to save New York City’s cabdrivers

China`s Belt and Road Initiative (BRI) has left scores of lower and middle-income countries (LMIC) saddled with "hidden debts" totalling USD 385 billion, according to new research.The findings are part of a report published by AidData, an international development research lab based at the College of William and Mary in Virginia. According to this report, China has used debt rather than aid to establish a dominant position in the international development finance market.

The report has analysed more than 13,000 aid and debt-financed projects worth more than USD 843 billion across 165 countries. According to AidData, over 40 LMIC now have levels of debt exposure to China higher than 10 per cent of their national gross domestic product.The number of "mega-projects"--financed with loans worth USD 500 million or more--approved each year tripled during the first five years of BRI implementation.&nbsp;

Also Read | <a href="https://www.wionews.com/south-asia/sri-lanka-stops-tainted-fertiliser-import-from-china-417088">Sri Lanka stops 'tainted' fertiliser import from China</a>

Despite larger loans and expanded loan portfolios, BRI has not led to any major changes in the sectoral or geographical composition of China`s overseas development finance program, the report said.As per the report, 35 per cent of the BRI infrastructure project portfolio has encountered major implementation problems, such as corruption scandals, labour violations, environmental hazards, and public protests.&nbsp;

By comparison, only 21 per cent of the Chinese government`s infrastructure project portfolio outside of the BRI has encountered similar implementation problems, according to AidData.Since its launch in 2013, the BRI has been well received across the globe due to its easy loan parameters. However, these concessions facilitated economic and military expansion for the Chinese, allowing them to build infrastructure, establish military bases in BRI- recipient countries, reported The Times of Israel.

Also Read | <a href="https://www.wionews.com/world/wechat-blocks-china-evergrande-messaging-groups-some-users-say-417075">WeChat blocks China Evergrande messaging groups, some users say</a>

A large number of these sovereign loans are in fact extended to developing countries and are negotiated in secret. A few of these loans use resources as collateral. This dept trap diplomacy, the lack of transparency and unreasonable loan conditions have made these schemes extremely unpopular and as a result, have earned the BRI a lot of bad press.

Also Read | <a href="https://www.wionews.com/world/china-belt-and-road-drive-385-billion-trap-and-counting-416954">China 'Belt and road' drive: $385 billion trap and counting</a>

Unsustainable loans and cases of debt traps in countries like Sri Lanka and Malaysia as well as the use of sovereign land for building China`s military installations have made the BRI a cause for concern.

The latest report reveals new insights about the BRI, and it comes at a time when the U.S. government and its allies are seeking to develop a viable alternative to the BRI, under the auspices of the Build Back Better World (B3W) initiative that the G7 announced in June 2021.In a bid to compete with BRI, even the European Union recently launched the Global Gateway, a new infrastructure development scheme.

China`s Belt and Road Initiative (BRI) has left scores of lower and middle-income countries (LMIC) saddled with "hidden debts" totalling USD 385 billion, according to new research.

China`s Belt and Road Initiative (BRI) has left scores of lower and middle-income countries (LMIC) saddled with "hidden debts" totalling USD 385 billion, according to new research.The findings are part of a report published by AidData, an international development research lab based at the College of William and Mary in Virginia. According to this report, China has used debt rather than aid to establish a dominant position in the international development finance market. The report has analysed more than 13,000 aid and debt-financed projects worth more than USD 843 billion across 165 countries. According to AidData, over 40 LMIC now have levels of debt exposure to China higher than 10 per cent of their national gross domestic product.The number of "mega-projects"--financed with loans worth USD 500 million or more--approved each year tripled during the first five years of BRI implementation. Also Read | Sri Lanka stops 'tainted' fertiliser import from China Despite larger loans and expanded loan portfolios, BRI has not led to any major changes in the sectoral or geographical composition of China`s overseas development finance program, the report said.As per the report, 35 per cent of the BRI infrastructure project portfolio has encountered major implementation problems, such as corruption scandals, labour violations, environmental hazards, and public protests. By comparison, only 21 per cent of the Chinese government`s infrastructure project portfolio outside of the BRI has encountered similar implementation problems, according to AidData.Since its launch in 2013, the BRI has been well received across the globe due to its easy loan parameters. However, these concessions facilitated economic and military expansion for the Chinese, allowing them to build infrastructure, establish military bases in BRI- recipient countries, reported The Times of Israel. Also Read | WeChat blocks China Evergrande messaging groups, some users say A large number of these sovereign loans are in fact extended to developing countries and are negotiated in secret. A few of these loans use resources as collateral. This dept trap diplomacy, the lack of transparency and unreasonable loan conditions have made these schemes extremely unpopular and as a result, have earned the BRI a lot of bad press. Also Read | China 'Belt and road' drive: $385 billion trap and counting Unsustainable loans and cases of debt traps in countries like Sri Lanka and Malaysia as well as the use of sovereign land for building China`s military installations have made the BRI a cause for concern. The latest report reveals new insights about the BRI, and it comes at a time when the U.S. government and its allies are seeking to develop a viable alternative to the BRI, under the auspices of the Build Back Better World (B3W) initiative that the G7 announced in June 2021.In a bid to compete with BRI, even the European Union recently launched the Global Gateway, a new infrastructure development scheme.

China's BRI left several countries saddled with 'hidden debts': report

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More than 100 countries face cuts to public spending on health, education and social protection as the pandemic compounds already high levels of debt, a new report says.

The International Monetary Fund believes that 35 to 40 countries are "debt distressed".&nbsp;This means that a country is experiencing difficulties in servicing its debt, such as when there are arrears or debt restructuring.

However, the study says that this figure is a “gross underestimation”.&nbsp;

Countries falling into debt distress include Tunisia, Zambia and Ghana, said Faiza Shaheen, lead author of the report.

<a href="https://www.wionews.com/world/apple-to-pay-bonuses-of-up-to-1000-to-store-employees-415197">Also read |&nbsp;Apple to pay bonuses of up to $1,000 to store employees</a>

“We compiled a list of countries that are labelled as debt-distressed across a number of criteria, and estimate around 100 countries will have to reduce budget deficits in this period, even though the majority are still facing the third or fourth wave of the [Covid-19] pandemic,” the report said.

It added, “Furthermore, the ability to cancel this debt is complicated because many of these countries have taken on debt under non-concessional terms from private lenders. The trends in [the UN’s] Financing for Development (FFD) were entirely insufficient to meet the SDGs [sustainable development goals] even prior to Covid-19. Now there is a full-blown crisis.”

The researchers used a variety of indicators to identify countries deemed vulnerable due to rising levels of debts.&nbsp;

These indicators included their debt-to-GDP ratio, their debt-to-export ratio, as well as countries labelled as fiscally vulnerable by the UN Development Programme.

The country’s credit rating and growth trajectory were compared with its debt-service burden.

More than 100 countries face cuts to public spending on health, education and social protection as the pandemic compounds already high levels of debt, a new report says.

More than 100 countries face cuts to public spending on health, education and social protection as the pandemic compounds already high levels of debt, a new report says. The International Monetary Fund believes that 35 to 40 countries are "debt distressed". This means that a country is experiencing difficulties in servicing its debt, such as when there are arrears or debt restructuring. However, the study says that this figure is a “gross underestimation”. Countries falling into debt distress include Tunisia, Zambia and Ghana, said Faiza Shaheen, lead author of the report. Also read | Apple to pay bonuses of up to $1,000 to store employees “We compiled a list of countries that are labelled as debt-distressed across a number of criteria, and estimate around 100 countries will have to reduce budget deficits in this period, even though the majority are still facing the third or fourth wave of the [Covid-19] pandemic,” the report said. It added, “Furthermore, the ability to cancel this debt is complicated because many of these countries have taken on debt under non-concessional terms from private lenders. The trends in [the UN’s] Financing for Development (FFD) were entirely insufficient to meet the SDGs [sustainable development goals] even prior to Covid-19. Now there is a full-blown crisis.” The researchers used a variety of indicators to identify countries deemed vulnerable due to rising levels of debts. These indicators included their debt-to-GDP ratio, their debt-to-export ratio, as well as countries labelled as fiscally vulnerable by the UN Development Programme. The country’s credit rating and growth trajectory were compared with its debt-service burden.

COVID-19 worsens debt crisis, 35 to 40 countries are 'debt distressed': Report

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