The increasingly diverse array of creditors to debt-distressed EM governments – and the difficulties in getting China and Western lenders to see eye to eye – is already gumming up sovereign debt restructurings. And despite some positive noises from the latest World Bank and IMF meetings, this is likely to be a sign of things to come as the global economy continues to fracture. For the fiscally-strained countries in question, that will prolong economic pain and delay their ability to regain access to global capital markets. And in the future, external financing for low-income EMs may increasingly be split into camps dominated by lending from China and lending from Western investors/multilateral institutions.
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