When around 50 country leaders gathered in Paris in June for the Summit for a New Global Financing Pact, the main question on their agenda was a familiar one: how to tackle climate change and global poverty. Yet the summit was less conventional than it first appeared: France and Barbados, the event’s co-organizers, sought to advance these goals through new rules for restructuring developing countries’ debt, a prerequisite for giving them more fiscal space to help their populations. This focus is unusual, and it shows that aid is becoming the next battleground in the competition for global influence between China and the West.
Indebtedness in the global south has reached alarming levels in recent years. The trend emerged following the triple shock of the COVID-19 pandemic (which sank growth and fueled a rise in health care expenses), rising U.S. interest rates (which hit developing markets’ currencies and added to debt-servicing
