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Vast New Study Shows a Key to Reducing Poverty: More Friendships Between Rich and Poor

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Jimarielle Bowie at her alma mater, Angelo Rodriguez High School, in Fairfield, Calif. A lawyer, she credits some of her success to the friendships she made in high school.

Marissa Leshnov for The New York Times

Over the last four decades, the financial circumstances into which children have been born have increasingly determined where they have ended up as adults. But an expansive new study, based on billions of social media connections, has uncovered a powerful exception to that pattern that helps explain why certain places offer a path out of poverty.

For poor children, living in an area where people have more friendships that cut across class lines significantly increases how much they earn in adulthood, the new research found.

The study, published Monday in Nature, analyzed the Facebook friendships of 72 million people, amounting to 84 percent of U.S. adults aged 25 to 44.

Previously, it was clear that some neighborhoods were much better than others at removing barriers to climbing the income ladder, but it wasn’t clear why. The new analysis — the biggest of its kind — found the degree to which the rich and poor were connected explained why a neighborhood’s children did better later in life, more than any other factor.

The effect was profound. The study found that if poor children grew up in neighborhoods where 70 percent of their friends were wealthy — the typical rate of friendship for higher-income children — it would increase their future incomes by 20 percent, on average.

These cross-class friendships — what the researchers called economic connectedness — had a stronger impact than school quality, family structure, job availability or a community’s racial composition. The people you know, the study suggests, open up opportunities, and the growing class divide in the United States closes them off.


“Growing up in a community connected across class lines improves kids’ outcomes and gives them a better shot at rising out of poverty,” said Raj Chetty, an economist at Harvard and the director of Opportunity Insights, which studies the roots of inequality and the contributors to economic mobility. He was one of the study’s four principal authors, with Johannes Stroebel and Theresa Kuchler of N.Y.U. and Matthew O. Jackson of Stanford and the Santa Fe Institute.

The findings show the limitations of many attempts to increase diversity — like school busing, multifamily zoning and affirmative action. Bringing people together is not enough on its own to increase opportunity, the study suggests. Whether they form relationships matters just as much.

“People interested in creating economic connectedness should equally focus on getting people with different incomes to interact,” Professor Stroebel said.

Growing up, Jimarielle Bowie says, her family was lower-middle class. Her parents divorced, lost jobs and lost homes in the housing crisis of the late 2000s. So when she made friends in high school with girls who lived on the rich side of town, their lifestyles intrigued her. Their houses were bigger; they ate different foods; and their parents — doctors, lawyers and pastors — had different goals and plans for their children, including applying for college.

“My mom really instilled working hard in us — being knowledgeable about our family history, you have to be better, you have to do better,” said Ms. Bowie, 24, who goes by Mari. “But I didn’t know anything about the SAT, and my friends’ parents signed up for this class, so I thought I should do that. I had friends’ parents look at my personal statements.”

Ms. Bowie became the first person in her family to get a postgraduate degree. She’s now a criminal defense lawyer — a job she found through a friend of one of those high school friends.

“My experience meeting people who were more affluent, I got to get in those circles, understand how those people think,” she said. “I absolutely think it made a significant difference.”

Birds of a feather

Social capital, the network of people’s relationships and how they’re influenced by them, has long intrigued social scientists. The first known use of the phrase was in 1916, by L.J. Hanifan, a school administrator in West Virginia. Since then, researchers have found that ties to more educated or affluent people, starting in childhood, can shape aspirations, college-going and career paths.

But the new study is the first to show that living in a place that fosters these connections causes better economic outcomes, using a significantly larger data set than other studies, covering 21 billion Facebook friendships.

The researchers limited the data, which did not include names, to active Facebook users. They estimated users’ incomes based on their ZIP codes, college, phone model, age and other characteristics.

For each low-income Facebook user, the researchers determined where the person was currently living, and how many high-income friends they had. That gave them a measure of how economically connected each neighborhood was. Then they compared the new data with earlier research that used tax records to measure how much a particular neighborhood raised low-income children’s economic prospects.

The researchers were also able to link almost 20 million users to both their high school and to their parents on Facebook. Using those ties, they repeated their analysis, this time on high school connections between children of rich and poor parents, to measure the impact of relationships made early in life. They did a similar analysis for teenage Instagram users. And they built on an earlier analysis of siblings who moved at different ages to show that it was the place that made a difference, versus something about the families who moved to those places.

Each analysis had the same result: The more connections between the rich and poor, the better the neighborhood was at lifting children from poverty. After accounting for these connections, other characteristics that the researchers analyzed — including the neighborhood’s racial composition, poverty level and school quality — mattered less for upward mobility, or not at all.

“It’s a big deal because I think what we lack in America today, and what’s been dropping catastrophically over the last 50 years, is what I call ‘bridging social capital’ — informal ties that lead us to people who are unlike us,” said Robert Putnam, the political scientist at Harvard who wrote “Bowling Alone” and “Our Kids,” about the decline of social capital in the United States. “And it’s a really big deal because it provides a number of avenues or clues by which we might begin to move this country in a better direction.”

Other kinds of social capital matter, too, like rates of volunteering in a community and friendships with people from similar backgrounds. Yet the new study shows that even in places lacking in other kinds of social capital, an increase in cross-class relationships is enough to benefit children’s economic prospects. And it’s this kind of social capital that has decreased as the country has become more segregated by class. In recent decades, people have become more likely to live in neighborhoods and attend schools with people of similar economic status — behavior that social scientists say is driven by anxiety about falling down the income ladder in an age of growing inequality.

“The pressure that parents feel to try to give their kids a competitive advantage is amplified when society is unequal and there’s more to be lost,” said Jessica Calarco, a sociologist at Indiana University who studies inequality in schools and among families. “Our society is structured in ways that discourage these kinds of cross-class friendships from happening, and many parents, often white, are making choices about where to live and what extracurriculars to put their kids into that make those connections less likely to happen.”

As a result, rich people have mostly rich friends, and poor people have mostly poor friends.


Who’s Friends With Whom, by Income Group

Low-income people are far more likely than high-income people to make friends in their neighborhoods, the study found. But in poorer areas, there are fewer rich people nearby to befriend.

It’s human nature to befriend people who are similar, which is why most cultures have a phrase like “birds of a feather flock together,” Professor Putnam said. Even when people do form cross-class connections, there is evidence in this and other research that they gravitate toward people of the same race.

Ms. Bowie, who is Black and Japanese, said that the friends she made from wealthier families were also Black.

“Just being with Black people who had money was a culture shock,” she said. “But white people with money had a completely different lifestyle. At least with Black people, we had the same sayings, we saw the same movies, our grandparents had the same beliefs.”

The analysis did not directly measure the role of race, which was not provided in the Facebook data. (Though there are techniques researchers use to guess race, the authors of the new study did not use them.) But in more racially diverse places, the study found fewer cross-class relationships.

Race is clearly associated with levels of mobility, a variety of research has shown, including by Professor Chetty’s team. In general, Black people in segregated areas are more likely to experience concentrated poverty and have worse economic outcomes.

“There was speculation that maybe it was about differences in resources, quality of schools, social norms,” he said. “What we show here is places that have large Black populations tend to be more economically disconnected — both Black and white people living there have fewer high-income friends.”

It’s clear that other factors also influence outcomes for Black people in both segregated and integrated areas, he said, including racial discrimination in the labor market and mass incarceration.

But the researchers say their findings on the importance of cross-class relationships are true regardless of race. They found the same relationship — high economic connectedness leading to higher economic mobility — in neighborhoods that were nearly entirely white, Black or Hispanic.

‘A culture of success’

The researchers focused on high schools, one of the few settings where people of all classes make friends at similar rates, and a place where people form lifelong friendships before they start making decisions that may determine their economic trajectories.


Where People Make Friends,
By Income Rank


In college

The richest Americans make far more of their friends in college than low-income individuals do.

At work

Middle-class Americans tend to make more of their friends through their work.

In high school

Americans make relatively similar shares of their friends in high school regardless of socioeconomic status.

Through religious groups

People with lower incomes make slightly more of their friends in religious settings.

In the neighborhood

Neighborhoods play a much larger role in defining the friendships of the lowest-income Americans.


Angelo Rodriguez High School in Fairfield, Calif., which Ms. Bowie attended, had more cross-class friendships than the average large public high school.

Fairfield, midway between Sacramento and San Francisco, is an unusually diverse area, racially and economically, and three-quarters of Rodriguez’s student body of around 2,000 are students of color. The school, which opened in 2001, had a catchment area shaped like a reverse C, drawing from neighborhoods on the far sides of town — which is how Ms. Bowie ended up commuting to a wealthier area for school. It also allows some students outside the boundary to attend.

In general, larger and more diverse schools — both economically and racially — have a smaller share of cross-class connections. It can be harder to make friends in large groups, and there are more chances to form cliques with people from similar backgrounds. But Rodriguez High nurtured cross-class friendships in ways both planned and unintentional.

“Being at Rod, you become friends with everybody,” Ms. Bowie said. “Literally that’s what that school does.”



Ms. Bowie, third from left, with friends at prom her senior year at Angelo Rodriguez High School.

Photo supplied by Jimarielle Bowie

One thing that may have helped was the school’s campus layout, with a promenade around a central library, outdoor stage and quad. That was deliberate, said John Diffenderfer, president of Aedis Architects, which designed the campus: “Accidental unstructured interactions between students was a very high priority.”

Rodriguez High has a block schedule in which classes meet for two hours each, every other day. This creates small, diverse groups that spend a lot of time together. When large institutions do this, it helps foster cross-class friendships, the research found. Separating students based on academic achievement, through gifted or international baccalaureate programs, has the opposite effect.

Extracurricular activities and interest clubs also play a big role in bringing together students from different backgrounds, said Catie Coniconde, a Rodriguez school counselor who also graduated from the school, in 2006. Half the student body is enrolled in them.

“Kids get identified by their extracurriculars, more than race or socioeconomic status,” she said. “There’s the athletes, the band kids, the kids who are interested in anime.”

Timothy Malacarne, a sociologist at Nevada State College, has found that the arts in particular seem to foster friendships across racial and economic lines. “Anytime people do something hard together, they’re more likely to feel a sense of kinship that’s not based on the identity of your racial or socioeconomic group,” he said.

Athletics is another avenue, but sports are becoming more segregated as expensive club sports have overtaken recreational or school teams. Some school districts have begun offering free transportation, physical exams and equipment to allow more students to participate.

While pursuing shared extracurricular interests, the students begin to share aspirations, Ms. Coniconde said. Scoring well on the SAT and attending a four-year college are common goals at Rodriguez, she said. The students from the wealthier part of town usually arrive with those goals, while many students from lower-income families hadn’t considered them before.

“It just seemed like a culture of success,” she said. “The four-year push was huge at Rod, and it still is to this day.”

The power of friends

These ideas can be applied beyond high schools, the researchers said.

Colleges, for instance, could place incoming students with small groups of roommates from a variety of backgrounds, instead of randomly assigning them roommates or allowing them to choose their own. Yale does this, and the small groups generally live in the same dorms all four years. Its low-income students have unusually high levels of cross-class friendships. (It has fewer total such friendships, because low-income students are a minority, though it has committed to increasing the share to one-fifth by 2025.)

Large state colleges, where students can choose their roommates or sort into fraternities or sororities or off-campus housing, tend to have fewer friendships across class lines. The University of Mississippi, where more than a third of undergraduates participate in Greek life, has one of the lowest rates of cross-class friendships of any large public university.

Cities could prioritize centrally located parks and other communal spaces, especially those that are free. Libraries could host radio studios, writing centers, cafes, maker spaces, tool libraries and other programming that appeals to wealthier residents while continuing to offer critical services to low-income residents, bringing both groups together in one physical space.

And mentorship programs can build cross-class relationships, by pairing people from different socioeconomic backgrounds for extended periods. Friends of the Children matches at-risk children with paid professional mentors who spend four hours a week with them from kindergarten through high school graduation. Becoming a Man enrolls boys in school-based counseling groups and matches them with young professionals as mentors. Both have been shown to have powerful effects on children’s outcomes.

Ms. Bowie still lives in Fairfield and remains close with both sets of friends — those from her neighborhood and those she met in high school. Their trajectories have differed. Most of her neighborhood friends went to community college, live near home and are still figuring out what to do, she said. Her high school friends left town for four-year colleges and are pursuing careers in medicine and design.

Her experience straddling both worlds, she said, has been essential for her professional success.

“I got a lot of in-depth knowledge about cultures that I wouldn’t have gotten, not in college, law school or now, because of my high school experience,” she said. “Had I not had those experiences, I might have been really culture shocked by going into these spaces as an attorney.”

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Crypto broker Genesis owes Winklevoss exchange’s customers $900mn

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Digital asset trading group Genesis and its parent company Digital Currency Group owe customers of the Winklevoss twins’ crypto exchange $900mn as the collapse of FTX reverberates across the market.

New York crypto exchange Gemini, run by Tyler and Cameron Winklevoss, is trying to recover the funds after Genesis was wrongfooted by last month’s failure of Sam Bankman-Fried’s FTX crypto group, according to people familiar with the matter.

Gemini’s bid to recover the funds underscores how the crypto lending market, where investors lend out their coins in exchange for high rates of return, sits at the centre of the industry’s credit crunch.

Genesis is the main partner in Gemini’s “earn” programme, where retail investors lend out their coins in exchange for a fixed stream of returns. Gemini halted withdrawals from the scheme last month after Genesis said “unprecedented market turmoil” meant it did not have sufficient liquidity to make good on all of its redemption requests.

Gemini has now formed a creditors’ committee to recoup the funds from Genesis and its parent DCG, the people said. Gemini and Genesis declined to comment.

Genesis has been scrambling to raise funding and has hired investment banking boutique Moelis & Co to help it explore all possible options, according to the people familiar with the situation.

The creditor committee is in negotiations with both Genesis and DCG, the parent group of Genesis which is run by billionaire Barry Silbert, the people said. DCG was founded in 2015 and is one of the biggest investors in the crypto industry. It was valued at $10bn last year by investors including Singapore’s sovereign wealth fund GIC, Google’s venture arm CapitalG and SoftBank, and its subsidiaries include Genesis and investment manager Grayscale.

DCG itself owes money to its subsidiary Genesis; these intercompany loans have complicated the picture for creditors.

DCG has $2bn worth of outstanding debt, $1.7bn of which is owed to its own subsidiary Genesis through two loans. Over the summer, Genesis lost $1.1bn on a loan to collapsed hedge fund Three Arrows Capital. DCG took on Genesis’s liabilities in the process, subsequently owing $1.1bn to Genesis. Silbert told investors last week that DCG had separately borrowed $575mn from Genesis “on an arm’s length basis” to fund undisclosed investments and share buybacks from non-employee shareholders.

“Because of the way the liabilities are, they’re negotiating together,” said one person familiar with the matter about Genesis and DCG’s approach to creditors.

DCG declined to comment. The Financial Times revealed last week that some of DCG’s borrowing was used to fund its investments into another of its subsidiaries, Grayscale.

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Sam Bankman-Fried’s trading shop was given special treatment on FTX for years

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Alameda Research was allowed to exceed normal borrowing limits on the FTX exchange since its early days, Sam Bankman-Fried has said, in a concession that illustrates how the former billionaire’s trading shop enjoyed preferential treatment over clients years before the 2022 crypto crisis.

In an interview with the Financial Times, the 30-year-old described the outsized role Alameda played in launching the exchange in 2019 and how it had access to exceptionally high levels of borrowing from FTX from the beginning.

Bankman-Fried said that “when FTX was first started” Alameda “had fairly large limits” on its borrowing from the exchange but he “absolutely” wished he had subjected the trading firm to the same standards as other clients.

Asked if Alameda had continued to have larger limits than other clients, he said: “I think that may be true.” He did not specify how much larger Alameda’s limits were than those of other clients.

FTX and Alameda portrayed themselves publicly as distinct entities to avoid the perception of conflicts of interest between the exchange, which processed billions of dollars’ worth of client deals a month before its collapse, and Bankman-Fried’s proprietary trading firm.

Bankman-Fried’s comments shed light on longstanding special treatment for Alameda. The close links between the firms and the large amount of borrowing by Alameda from FTX played a key role in the spectacular collapse of the exchange, once one of the largest crypto venues and valued at $32bn by investors including Sequoia and BlackRock. 

Previously one of the most respected figures in the digital assets industry, Bankman-Fried has apologised for mistakes that left up 1mn creditors facing large losses on funds they entrusted to FTX, but has denied intentionally misusing clients’ assets.

Bankman-Fried said the origins of the large borrowing limits for Alameda came as a result of the trading shop’s early role as the main provider of liquidity on FTX before it attracted other financial groups.

FTX, like other big offshore trading venues, handled large volumes of derivatives that allowed traders to magnify their bets using borrowed funds — but professional firms are typically needed to make the market function smoothly.

“If you scroll back to 2019 when FTX was first started, at that point Alameda was 45 per cent of volume or something on the platform,” Bankman-Fried said. “It was basically a situation where if Alameda’s account ran out of capacity to take on new positions that would lead to risk issues for the platform because we didn’t have enough liquidity providers. I think it had fairly large limits because of that.”

By this year, he said, Alameda accounted for around 2 per cent of trading volume and was no longer the key liquidity provider on the exchange. Bankman-Fried said he regrets not revisiting the trading firm’s treatment to ensure that it was subject to the same limits on borrowing as other similar firms operating on the exchange. 

FTX lent to traders so they could make big bets on crypto with just a small initial outlay, known as trading on margin. FTX’s large exposure to Alameda was a key reason that weakness in the trading firm’s balance sheet caused a financial crisis that engulfed both companies.

Bankman-Fried has estimated Alameda’s liabilities to FTX at roughly $10bn by the time both companies filed for bankruptcy in November.

“From a volume, from a revenue, from a liquidity point of view, the exchange was effectively independent from Alameda. Obviously that did not turn out to be true in terms of positions or balances on the venue,” Bankman-Fried said.

John Ray, the veteran insolvency practitioner running FTX in bankruptcy, has criticised its former leadership for failing to keep Alameda and FTX separate. In court filings, he pointed to a “secret exemption of Alameda from certain aspects of FTX.com’s auto-liquidation protocol”. 

Automatic liquidation, or closing, of souring positions was a key tenet of FTX’s risk management procedures and a core part of its proposals to change parts of US financial regulation. When a typical client’s trade started to go underwater, FTX’s liquidation mechanism was meant to start draining the account’s margin to protect the venue from a single trade causing a loss for the exchange.

However, Bankman-Fried said there “may have been a liquidation delay” for Alameda and possibly other large traders. He said was “not confident” as to whether Alameda was subject to the same liquidation protocol as other traders on the exchange, and that the treatment of the trading firm’s account was “in flux”.

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Defaults Loom as Poor Countries Face an Economic Storm

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WASHINGTON — Developing nations are facing a catastrophic debt crisis in the coming months as rapid inflation, slowing growth, rising interest rates and a strengthening dollar coalesce into a perfect storm that could set off a wave of messy defaults that inflict economic pain on the world’s most vulnerable people.

Poor countries owe, by some calculations, as much as $200 billion to wealthy nations, multilateral development banks and private creditors. Rising interest rates have increased the value of the dollar, making it harder for foreign borrowers with debt denominated in U.S. currency to repay their loans.

Defaulting on a huge swath of loans would send borrowing costs for vulnerable nations even higher and could spawn financial crises when nearly 100 million people have already been pushed into poverty this year by the combined effects of the pandemic, inflation and Russia’s war in Ukraine.

The danger poses another headwind for a world economy that has been sputtering toward a recession. The leaders of the world’s advanced economies have been grappling privately in recent weeks with how to avert financial crises in emerging markets such as Zambia, Sri Lanka and Ghana, but they have struggled to develop a plan to accelerate debt relief as they confront their own economic woes.

As rich countries brace for a global recession and try to cope with high food and energy prices, investment flows to the developing world have been abating and big creditors, particularly China, have been slow to restructure loans.

Mass defaults in low-income countries are unlikely to spur a global financial crisis given the relatively small size of their economies. But the potential is causing policymakers to rethink debt sustainability in an era of rising interest rates and increasingly opaque loan transactions. In part, that’s because defaults can make it harder for countries like the United States to export goods to indebted nations, further slowing the world economy and possibly leading to widespread hunger and social unrest. As Sri Lanka drew closer to its default this year, its central bank was forced to arrange a barter agreement to pay for Iranian oil with tea leaves.

“Finding ways to reduce the debt is important for these countries to get to the light at the end of the tunnel,” said David Malpass, the World Bank president, in an interview at the summit for the Group of 20 nations last month in Bali, Indonesia. “This burden on the developing countries is heavy, and if it goes on, they continue to get worse, which then has impacts on advanced economies in terms of increased migration flows and lost markets.”

The urgency follows lockdowns to contain the coronavirus in China and Russia’s war in Ukraine, which have stunted global output and sent food and energy prices soaring. The Federal Reserve has been rapidly raising interest rates in the United States, bolstering the strength of the dollar and making it more expensive for developing countries to import necessities for populations already struggling with rising prices.

Economists and global financial institutions such as the World Bank and the International Monetary Fund have been raising alarm about the gravity of the crisis. The World Bank projected this year that about a dozen countries could face default in the next year, and the I.M.F. calculated that 60 percent of low-income developing countries were in debt distress or at high risk of it.

Since then, the finances of developing countries have continued to deteriorate. The Council on Foreign Relations said this past week that 12 countries now had its highest default rating, up from three 18 months ago.

Brad Setser, a senior fellow at council, estimates that $200 billion of sovereign debt in emerging markets needs to be restructured.

“It is certainly a systemic problem for the countries that are affected,” Mr. Setser said. “Because an unusually large number of countries borrowed from the market and borrowed from China between 2012 and 2020, there’s an unusually large number of countries that are in default or at risk of default.”

Restructuring debt can include providing grace periods for repayment, lowering interest rates and forgiving some of the principal amount that is owed. The United States has traditionally led broad debt-relief initiatives such as the “Brady Bond” plan for Latin America in the 1990s. However, the emergence of commercial creditors that lend at high rates and prolific loans from China — which has been loath to take losses — has complicated international debt relief efforts.

Fitch, the credit rating firm, warned in a report last month that “more defaults are probable” in emerging markets next year and lamented that the so-called Common Framework that the Group of 20 established in 2020 to facilitate debt restructuring “is not proving effective in resolving crises quickly.”

Since the framework was established, only Zambia, Chad and Ethiopia have sought debt relief. It has been a grinding process, involving creditor committees, the International Monetary Fund and the World Bank, all of which must negotiate and agree upon how to restructure loans that the countries owe. After two years, Zambia is finally on the verge of restructuring its debts to China’s state banks, and Chad reached an agreement last month with private creditors, including Glencore, to restructure its debt.

Bruno LeMaire, the French finance minister, said that the progress with Zambia and Chad was a positive step, but that there was much more work to be done with other countries.

“Now we should accelerate,” Mr. Le Maire said on the sidelines of the Group of 20 summit.

China, which has become one of the world’s largest creditors, remains an obstacle to relief. Development experts have accused it of setting “debt traps” for developing countries with its lending program of more than $500 billion, which has been described as predatory.

“This is really about China being unwilling to admit its lending has been unsustainable and China dragging its feet in getting to deals,” said Mark Sobel, a former Treasury Department official and the U.S. chairman of the Official Monetary and Financial Institutions Forum.

The United States has regularly urged China to be more accommodating and complained that Chinese loans are difficult to restructure because of the opaque terms of the contracts. It has described China’s lending practices as “unconventional.”

“China is not the only creditor holding back quick and effective implementation of the typical playbook,” said Brent Neiman, a counselor to Treasury Secretary Janet L. Yellen, in a speech in Washington in September. “But across the international lending landscape, China’s lack of participation in coordinated debt relief is the most common and the most consequential.”

China has accused Western commercial creditors and multilateral institutions of failing to do enough to restructure debts and denied that it has engaged in predatory lending.

“These are not ‘debt traps,’ but monuments of cooperation,” Wang Yi, China’s foreign minister, said this year.

China’s own economy is slowing because of its strick “zero Covid” policy, which has included mass testing, quarantines and lockdowns of its population. A domestic real estate crisis has also made it more difficult for China to accept losses on loans that it has made to other countries.

I.M.F. officials will travel to Beijing this coming week for a “1+6” roundtable with the leaders of major international economic institutions. During those meetings, they will help China better understand the process of debt restructuring through the common framework.

Ceyla Pazarbasioglu, the director of the strategy, policy and review department at the I.M.F., acknowledged that agreeing to terms on debt relief could take time, but said she would convey the urgency to Chinese officials

“The problem we have is that we don’t have the time right now because countries are very fragile in dealing with debt vulnerability,” Ms. Pazarbasioglu, who will travel to China, told reporters at the I.M.F. this past week.

At the annual meetings of the I.M.F. and World Bank in Washington in October, policymakers said the pace of debt restructuring was too slow and called for coordinated action among creditors and borrowers to find solutions before it was too late.

During a panel discussion about debt restructuring, Gita Gopinath, the first deputy managing director of the I.M.F., said countries and creditors needed to avoid the kind of wishful thinking that led to defaults.

“There is very much the tendency to gamble for redemption,” Ms. Gopinath said. “There’s very much a tendency for creditors to hope there will be gambling for redemption, and then nothing gets solved.”

But at the conclusion of the Group of 20 meeting in November, it appeared that little progress had been made. In a joint declaration, the leaders expressed their concern about the “deteriorating debt situation” in some vulnerable middle-income countries. However, they offered few concrete solutions.

“We reaffirm the importance of joint efforts by all actors, including private creditors, to continue working toward enhancing debt transparency,” the statement read.

The statement included a footnote saying that “one member has divergent views on debt issues.” That country, according to people familiar with the matter, was China.

In the interview, Mr. Malpass said that China had been willing to discuss debt relief, but that the “devil is in the details” when it comes to restructuring loans to reduce debt burdens.

The World Bank president predicted that the fiscal problems facing developing countries were unlikely to become a global debt crisis of the kind that occurred in the 1980s when many Latin American countries could not service their foreign debt. He suggested, however, that there was a moral imperative to do more to help poor countries and populations that had been pushed deeper into poverty during the pandemic.

“There would be continued reversals in development in terms of poverty, in terms of hunger and malnutrition, which are already going up,” Mr. Malpass said. “And it’s coming at a time when countries need more resources, not less.”

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