Editor's note: Djoomart Otorbaev is the former Prime Minister of the Kyrgyz Republic, non-resident senior fellow of the Chongyang Institute for Financial Studies at Renmin University of China, and a member of Nizami Ganjavi International Center. The article reflects the author's views, and not necessarily those of CGTN.

Facing the plight of COVID-19 and the looming economic prospects, governments and international organizations have devoted themselves to avoiding a debt crisis.

According to recent reports, over 100 low- and middle-income countries will still have to pay a total of 130 billion U.S. dollars in debt service in 2020.

To deal with this debt crisis, the finance ministers of G20 agreed on a "time-bound suspension of debt service payments" for the 77 poorest countries in the world during online spring meetings of the International Monetary Fund (IMF) and the World Bank (WB) on April 15 as these countries fought an economic battle with the coronavirus. Within this Debt Service Suspension Initiative (DSSI), a payment of an estimated 12 billion U.S. dollars due to be paid between May 1 and the end of 2020 has been rescheduled.

On the one hand, for the first time in modern history and in a quite tense geopolitical environment, a fundamental consensus-based decision has been made. Indeed, among the signatories were the U.S., China and Russia, which, as a rule, have opposite opinions on the development of world processes. On the other hand, many criticized the actions of G20 for halfheartedness of their decisions as insufficient.

COVID-19 continues to wreak havoc on humanity. After 30 years of poverty reduction, it is rising again. World Bank estimates that up to 100 million people risk falling into extreme poverty. 

The World Food Program forecasts that around 265 million people around the world will face sharp food insecurity by the end of this year, twice as much as approximately 135 million who suffered food shortages last year. The International Labor Organization predicts that up to 340 million jobs could be lost because of the pandemic.

Thus, lenders have no other option, except for an additional extension of the restructuring of the debt repayment of poor countries beyond 2020. On July 18, the IMF and World Bank urged the G20 to extend the program, citing the "increasingly desperate" situation of the countries in need of help, receiving positive response.

Before the G20 meeting in April, many have wondered how China the biggest lender would play its part in the global debt-relief initiative. 

In the past, China didn't disclose how much it has lent to whom or on what terms. It isn't a member of the Paris Club of sovereign guarantee lenders, which tries to co-ordinate debt management among its members, making sure that lenders act following the established rules. Now, for the first time in its history, China has fully disclosed its current relations with borrowers.

Upon the call from the Executive Board of the World Bank earlier in the year that it wanted to reveal more data about the government's debts of the eligible countries, both lenders and borrowers had supplied the required data. Newly generated World Bank data-set has become a great breakthrough to a full transparency of relationships between lenders and borrowers. We now know how much debt borrowers have, and how much they owe to the lenders.

Those data showed that as of 2018, the 72 developing countries owed to Chinese creditors 104 billion U.S. dollars out of a total debt of 514 billion U.S. dollars. That amount includes loans direct from China's government, from "policy banks", such as China Development Bank, and profit-seeking loans from state-owned commercial lenders. 

The same countries owed 106 billion U.S. dollars to the World Bank and 60 billion U.S. dollars to private holders of sovereign bonds. The new figures confirmed the fact that China is by far the biggest bilateral creditor to the low-income countries. 

It accounts for about 20 percent of the total foreign debt owed by the 73 governments eligible for the G20 initiative, and about 30 percent of their debt service this year. That is more than all the Paris Club lenders, including the U.S., European countries and Japan, combined.

In accordance to Chinese internal sources, these numbers are even higher. As of the end of 2017, the statistical data from the People's Bank of China on the country's International Investment Position showed outstanding international lending number at 637 billion U.S. dollars. China is now in the driver's seat when it comes to control and manage the sovereign debt of developing countries.

It looks likely now that China will continue its policy of openness towards international lending. On June 17, Chinese President Xi Jinping made a clear statement, "We encourage Chinese financial institutions to respond to the G20's Debt Service Suspension Initiative."

Who knows, perhaps that the day when the country will join the Paris Club of creditors is not far off. The situation when the largest sovereign lender is outside the Paris Club is not natural.

These are not normal times and humanity must respond accordingly. This crisis has emphasized the need for the world to stand together. Both debt relief, and perhaps some cancellations, will represent an urgent and essential means of assisting the most fragile communities to sustain the damages caused by the pandemic. 

Now it gets clearer than ever that any coordinated effort to provide meaningful debt relief to the most vulnerable countries must comprise the debts owed to China.

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