China Belt-Road Plan May Create Debt Problems From Djibouti To Laos (Bloomberg)

China’s Belt and Road Initiative creates the potential for debt-sustainability problems in some of the world’s weakest economies, according to the Center for Global Development.

 

The infrastructure project -- aimed at forging new economic links with Europe, Asia and Africa -- puts Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan “at particular risk of debt distress,” researchers at the Washington-based research institute said in a report on Sunday.

 

“Belt and Road provides something that countries desperately want -- financing for infrastructure,” co-author John Hurley, a visiting policy fellow on leave from the U.S. Treasury Department, said in a statement with the report. “But when it comes to this type of lending, there can be too much of a good thing.”