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CGD Policy Blogs

 

AIIB, Tajikistan, and the Risks of Non-Concessional Lending

The Asian Infrastructure Investment Bank's (AIIB) second loan to Tajikistan in the space of a year raises questions about lending on “hard terms” to poor countries. In its eagerness to meet the investment needs of Asian countries, is the AIIB going to get burned by lending at non-concessional rates to poor countries? Or, if a country becomes unable to pay all its bills, will it treat the AIIB as a preferred creditor and prioritize debt service payments over the needs of the poor?

Responding to Cambodia’s Request for Debt Cancellation

Cambodia’s Prime Minister and former Khmer Rouge commander Hun Sen has called on the Trump administration to cancel Cambodia’s debt to the US Government incurred by the Lon Nol regime in the 1970s. Because the loans, which were used to pay for food purchased from the United States, have not been serviced, the total amount owed is estimated to now be more than US$500 million. While the Trump administration may not immediately embrace Cambodia’s request, it is worth both sides considering the possibility of a deal.