In recent times, the economic crisis is creating many problems, with social clashes in the world. Recently, we have seen the example of Sri Lanka. I would like to ask scholars if we are facing the effects of structural adjustment policy of the last decades, following the settlement of the debts?
Many developing countries have accumulated high levels of debt in recent decades as a result of the low interest rate policy in Western countries and have also fallen for China's "New Silk Road" initiative, which has driven the external national debt of many developing countries to irresponsible levels with gag agreements. As a result of the Russian aggression against Ukraine, energy and food prices have increased dramatically, making the consequential costs of government debt unbearable for many developing countries. Now it remains to be seen whether China is in fact the "well-meaning dictator" coming to the aid of these countries, or whether it will push them further into misery. I would rather put my trust in the offers of help from Western, democratic states, which also have the tried-and-tested international institutions that have often successfully managed such debt crises.
Thank you to open the debate, Professor! Your reply contains many sources of interesting discussions.
The combined external debt of emerging markets and developing nations is around $11 trillion, with $3.9 trillion of that amount due for debt service in 2020. Of total, principal repayments account for nearly 3.5 trillion dollars. The debt service on the remaining short-term debt, the majority of which is regular trade finance, is approximately $1 trillion.
The 2020 MLT debt service is approximately $36 billion for the poorest nations (all those eligible for assistance from the International Development Association or IDA), split roughly equally between multilateral, bilateral (mainly non-Paris Club), and commercial creditors.
According to the World Bank's most recent study, "Finance for An Equitable Recovery," published in February, unstable financial systems in emerging economies make them more susceptible to other problems including rising inflation and interest rates.
Private investment is being competed against by weak local loan markets in many emerging nations, which is slowing the recovery. Tighter global financial conditions.
Thank you too for your answer! We know that the issue of the Debt has a fundamental importance in the development and management of any country. The situation of Developing countries, especially Africans, is not easy to analize, even with the best data from International Institutions. Thank you to mention the external debt and its services. That will help for further analysis.
- Badges
- Science topic
- Similar topics
- Biological Science
- Molecular Cell Biology
- Culture Cells
- Cell Line