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China has emerged as a lender of last resort for developing countries that are having difficulty repaying their Belt and Road Initiative (BRI) debts. According to a new study by researchers at AidData, the World Bank, the Harvard Kennedy School, and the Kiel Institute for the World Economy, Beijing has dramatically expanded emergency rescue lending to sovereign borrowers in financial distress—or outright default.

Analysis of a new dataset demonstrates that, by the end of 2021, China had undertaken 128 rescue loan operations across 22 debtor countries worth $240bn. These operations include many so-called “rollovers,” in which the same short-term loans are extended again and again to refinance maturing debts.

According to the authors, Beijing does not offer bailouts to all BRI borrowers in distress: low-income countries are typically offered a debt restructuring that involves a grace period or final repayment date extension but no new money, while middle-income countries tend to receive new money—via balance of payments (BOP) support—to avoid or delay default.

Chinese banks have an interest in ensuring that their biggest overseas borrowers are sufficiently liquid to continue servicing outstanding BRI project debts. Middle-income countries, which represent 80 percent or more than $500bn of China’s total overseas lending, pose major balance sheet risks, so Chinese banks have incentives to keep them afloat via bailouts. Low-income countries, which represent only 20 percent of China’s total overseas lending, are less important to the health of the Chinese banking sector and rarely get bailed out.

“Beijing is ultimately trying to rescue its own banks. That’s why it has gotten into the risky business of international bailout lending,” said Carmen Reinhart, one of the study’s authors. “But if you are going to bail out a borrower that is in default or teetering on the edge of default, it’s important to have a clear understanding of whether you are trying to solve a short-term liquidity problem or a long-term solvency problem.”

The authors of the new study find that China has channeled bailout funds to countries with low foreign exchange reserve levels and weak sovereign credit ratings. To date, it has undertaken rescue lending operations in 22 countries, including Argentina, Belarus, Ecuador, Egypt, Laos, Mongolia, Pakistan, Suriname, Sri Lanka, Turkey, Ukraine, and Venezuela.

Swarnim Wagle, a Nepali Congress leader and renowned economist, has left the party. Wagle announced his separation from the party through a social media post, creating ripples in the digital forum where both his admirers and critics traded blows over his move. Citing the main reason behind the loss of his love for the party, Wagle wrote: “I have decided to part ways with the Nepali Congress, with which I had been associated since the mid-1980s.” 

“Congress has now turned into an incompetent gang of family members,” the youth leader wrote in his astute observation, noting that he had played a significant role in improving the Congress’ economic policies and planning in various capacities over the decades.  “During my indirect association with the party spanning 30 years and direct contribution of 10 years, I conducted several intellectual-theoretical discussions and training. At the same time, I played a role in expanding international legitimacy for the party,” he pointed out.

Wagle ‘felt proud’ to note that both Sushil Koirala and Sher Bahadur Deuba had appointed him at the National Planning Commission. Giving himself a pat on his back for a job well done, Wagle noted that he had been able to fulfill the responsibilities entrusted to him and enhance Nepal’s prestige. 

Elaborating on his future plans, Wagle said he will be active in a new public role with the beginning of the new year, carrying forward the agendas of democracy and economic progress on the foundation of good governance. 

The Nepali Congress has decided to field Govinda Bhattarai in Tanahun-1 and Jit Narayan Shrestha in Chitwan-2 in the by-election to the member of the House of Representatives scheduled for April 23. A meeting of the NC Central Work Execution Committee held at the party headquarters in Sanepa this morning made the decision to this effect, said Chief Secretary of NC Party Office Krishna Prasad Poudel. However, the decision would be taken later regarding the candidate in Bara-2, he said. Tanahun-1 has remained vacant after HoR member Ram Chandra Poudel was elected to the post of the President. Similarly, Bara-2 has remained vacant after Ram Sahaya Prasad Yadav was elected to the post of Vice-President. Likewise, Chitwan-2 has remained vacant following a citizenship dispute of Rabi Lamichhane. The Election Commission has made preparations to hold by-election in these three constituencies on April 23.  

The government has decided to resolve border issues with India and China through diplomatic efforts. In the Common Minimum Program, the 10-party alliance led by Prime Minister Pushpa Kamal Dahal said that it would resolve the border issues with the neighboring countries in Limpiyadhura, Lipulek, Kalapani and other areas through diplomatic means. The government has decided to increase the border security post for the effective management and regulation of the border.