This piece in the Financial Times reports how studies from across the ideological spectrum, by Debt Justice campaign and the IMF, show that “[l]ow-income countries will face their biggest bills for servicing foreign debts in a quarter of a century this year, putting spending on health and education at risk.”
The report says: “The figures — the highest since 1998 — follow a steep rise in global borrowing costs last year, when central banks sought to counter high inflation with rapid rate rises.”
Some argue that this may call for debt relief at a large scale like when “[m]ultilateral lenders and foreign governments led by the IMF and the World Bank delivered far-reaching debt relief around the turn of the millennium.” The argument goes that this may even require “changes to laws governing bond contracts in England and the state of New York to force private creditors to take part in debt cancellation.”
Sri Lanka, having been in the news for some time now due to its financial troubles, “faces the steepest schedule of external repayments, equal to 75 per cent of government revenues this year. The country is unlikely to meet those payments following a default on its external debts last year.”
Read the full report here.
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