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Vol 4 (AAC) No 1

Published 1st November 2010


The price of debt forgiveness

Kinshasa may have to rethink its deals with China if it wants debt write-offs from Western creditors

European powers are blocking billions of dollars of debt relief to President Joseph Kabila’s government until it agrees to revise some of its trade and financing deals with China. As with Kinshasa’s dispute with the World Bank and the International Monetary Fund over debt write-offs, the European argument is that it makes no sense for Kinshasa to secure the reduction of unsustainable debt obligations if it then contracts fresh – and equally unsustainable – debt obligations from new creditors in Asia.

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