Debt Restructuring for Commodity Exporters
Even if they manage to convince their creditors to restructure their debts, commodity-exporting debtor countries are still vulnerable to sudden price fluctuations. Commodity bonds could help remove the most significant source of risk facing many debt-distressed countries in Africa, Latin America, and the Middle East.
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CAMBRIDGE – The world is in the midst of a debt crisis. A recent report estimates that 61 emerging-market and developing economies – nearly one-third of the International Monetary Fund’s member countries – are facing debt distress. The G20’s Common Framework for Debt Treatments, which aims to help low-income countries restructure their sovereign debts, was supposed to prevent this crisis from spiraling out of control. But progress so far has been slow and uneven.