Things have changed since the days when debt-stricken countries only had to negotiate with government creditors in the so-called Paris Club and with the commercial lenders that typically formed ad hoc negotiating committees. Each group was suspicious that the other might get better debt restructuring terms. The Paris Club attempted to neutralise this risk by requiring sovereign debtors to commit to “seek” from other lenders — both commercial and non-Paris Club bilateral creditors — restructuring terms no less favourable to the debtor than those agreed with the Paris Club. This embodied what the Paris Club called its “comparable treatment” principle. Over the past decade, however, China (very much not a member of the Paris Club) has become the world’s largest bilateral creditor. A sovereign borrower today must therefore negotiate not only with its Paris Club and commercial creditors, but also with other bilateral lenders such as China, India and South Africa.
Lee Buchheit & G. Mitu Gulati, Breaking the Sovereign Debt Impasse, Financial Times ( (September 26, 2022).