Central Asian nation Kyrgyzstan is in discussions with the Export-and-Import Bank of China (Eximbank) to restructure its USD1.8bn debt to China, as reported by Reuters on April 29. Kyrgyzstan's Deputy Prime Minister Erkin Asrandiyev said the country is having difficulties coping with the impacts of the coronavirus and is, therefore, seeking debt-adjusted terms with Eximbank.
While the prolonged COVID-19 pandemic has brought developed markets into a halt, the health crisis has pushed some low-income countries into serious economic difficulties. Kyrgyzstan, alongside many emerging markets such as Latin American and African nations, is struggling to fight off the rapid outbreak of the coronavirus with inadequate health facilities and insufficient medical resources. As part of China's broader strategy to establish its influence in the Middle East, Middle Asia, and Africa, many countries from these regions have become beneficiaries under the Belt and Road (BaR) initiatives. Under normal circumstances, members participating in the BaR campaign would have received marked FDIs from China and are entitled to lower interest payments and longer repayment terms if borrowing from Chinese counterparts. However, on the flip side, since many global business activities have virtually come to a complete halt, some of these debt-ridden countries would have to negotiate debt reliefs with China.