Zambia Is on the Verge of a Pandemic-Related Debt Default

Here is today’s Foreign Policy brief: Zambia faces debt default as coronavirus cripples economy, China and India agree to de-escalate tensions along the Line of Actual Control, and protests in Colombia against police brutality continue.

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Zambian President Edgar Lungu’s government said that it was seeking “the suspension of debt service payments for a period of six months” from private creditors holding around $3 billion in international bonds, possibly making Zambia the first African country to default on its debt due to the coronavirus pandemic.

The government blamed “a combination of declining revenues and increased unbudgeted costs caused by the Covid-19 pandemic.” It is asking bondholders to meet on Oct. 20 to seek permission to defer interest payments until next April as it plans to restructure its debt.

Ripple effect. Zambia has been hurtling toward a debt crisis for months. In July, the Wall Street Journal reported that government debt was on course to surpass 100 percent of the country’s gross domestic product this year, rooted in economic pressures that far predated the pandemic. But Zambia is one of several African countries suffering from a heavy burden of debt, and if its default represents the first in a string of similar cases, it could be disastrous for countries across the developing world.

Silver lining? But as Ashfaq Zaman wrote in Foreign Policy earlier this month, some developing countries could be better off in the long run. African economies have several advantages over their European counterparts, including a much younger population, and since European economies are also expected to contract significantly in the aftermath of the pandemic, “the coronavirus could be the great global leveler for this generation.”

Great power rivalry at UNGA. Tensions between the United States and China flared at the U.N. General Assembly after U.S. President Donald Trump called on China to be held “accountable” for “[unleashing] this plague on to the world,” referring to the coronavirus. Speaking after Trump, Chinese President Xi Jinping warned of a “clash of civilizations” but refused to enter the fray with Trump, saying only that “we will continue to narrow differences and resolve disputes with others through dialogue and negotiation.”

Tuesday’s events reflect both countries’ broader attitudes toward international bodies like the United Nations. As the United States grows increasingly hostile toward multilateralism, China is working to step into the void. As Foreign Policy’s Colum Lynch wrote in August, China has slowly expanded its role at the U.N., becoming more deeply involved in international peacekeeping efforts, financial investment, and global education.

Greece and Turkey ready to talk. On Tuesday, Greek and Turkish officials agreed to resume talks for the first time in four years in order to try to resolve their long-running dispute in the eastern Mediterranean. Officials did not say when talks would begin, but preparations are underway and they could start as early as the end of the month.

Both countries have a wide gap to bridge. Greece and Cyprus have been pushing the European Union to take a tougher stance on Turkey, and Cyprus recently scuttled plans by the bloc to sanction Belarusian leaders over its unwillingness to apply similar pressure to Turkey. A summit of EU officials to discuss the dispute originally scheduled for later this week has been postponed to the beginning of October.

Tensions ease around the LAC. China and India have agreed not to send more troops to their contested border and to refrain from engaging in activity that could be seen as provocative. According to a statement released by the Indian government, both sides have agreed to “avoid misunderstandings and misjudgments” and to “refrain from unilaterally changing the situation on the ground.” The joint decision follows a series of meetings between military commanders which came on the heels of a marked increase in tensions along the Line of Actual Control (LAC) this year.

Tensions flared late last month after both sides accused the other of firing shots over the LAC, the first time shots were reported fired in decades. That incident followed a deadly altercation in June that left dozens of soldiers dead.

Protests in Colombia continue. Protests against police brutality in Colombia turned violent as anger over the police killing of a man who violated coronavirus restrictions boiled over. Tensions between protesters and police in Colombia have intensified in recent weeks. Earlier this month, at least seven people were killed in clashes after the police killing of a man in the capital of Bogotá. In addition to the seven deaths, officials said hundreds of people were injured in the ensuing unrest.

Afghan talks falter. Zalmay Khalilzad, the U.S. special envoy to Afghanistan, warned that the current levels of violence in the country are too high as the risk to the peace talks between the government and the Taliban grows. While Khalilzad expressed hope in the current round of negotiations, he also warned that there “will be setbacks and obstacles.” Khalilzad’s statements come after a wave of violence hit Afghanistan earlier this week, in which dozens of security force personnel and Taliban militants were killed in clashes. Several civilians were also killed over the weekend in a series of airstrikes launched by the government in the northern part of the country.

Mali leader seeks an end to sanctions. Colonel Assimi Goita, the leader of Mali’s military junta, demanded that the 15-nation Economic Community of West African States (ECOWAS) end the sanctions it imposed on the country in the aftermath of last month’s coup, which brought down the government of President Ibrahim Boubacar Keita. Earlier this week, the junta rolled out plans to install former Defense Minister Bah Ndaw, a retired military officer, as interim president to lead the transitional government, with Goita himself serving as prime minister.

ECOWAS has not yet responded to the developments in Mali, but it is unlikely to support the junta’s appointments nor respond positively to its demands. The bloc previously warned the junta that it would only lift its sanctions if civilian leaders were picked to lead the transitional government.

Finland will begin using coronavirus-sniffing dogs at Helsinki Airport on Wednesday, part of a pilot program aimed at making dogs a part of screening for COVID-19. The tests will be voluntary and will deliver results within 10 seconds, after which participants will take a conventional test in order to help researchers determine the accuracy of the dogs’ reading. A person’s health can change the way they smell, and researchers at the University of Helsinki recently found evidence that dogs can use bodily scent to sniff out the virus.

Wednesday’s pilot program will be the first large-scale trial run for coronavirus-sniffing dogs and will help determine if dogs can be used as an effective tool for detecting the virus.

That’s it for today. 

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