Even though developing countries' debt burdens have increased only moderately overall, the flow of funds they receive from capital markets has remained dismally low. Now that global financial conditions are tightening, advanced economies should extend a helping hand using the tools that they already have available.
CAIRO – Since the Latin American debt crisis of the 1980s, sovereign-debt crises have become a regular occurrence for emerging and developing economies. Today, Sri Lanka needs a bailout from the International Monetary Fund after defaulting on its foreign debt in May, and a growing number of low-income countries are facing similar challenges. The World Bank estimates that around 60% of all emerging and developing economies have become high-risk debtors. As many as a dozen might default over the next 12 months.
CAIRO – Since the Latin American debt crisis of the 1980s, sovereign-debt crises have become a regular occurrence for emerging and developing economies. Today, Sri Lanka needs a bailout from the International Monetary Fund after defaulting on its foreign debt in May, and a growing number of low-income countries are facing similar challenges. The World Bank estimates that around 60% of all emerging and developing economies have become high-risk debtors. As many as a dozen might default over the next 12 months.