A global pandemic. Rising inflation. The threat posed by climate change. Global policymakers have enough to keep them occupied without a developing country debt crisis adding to their list of problems.
That is a real possibility. Both the World Bank and the International Monetary Fund used their annual meetings to stress the pressure poorer countries were under and the need for urgent, collective action. They are right to be worried because debt is at record levels, defences against a crisis are inadequate and the clock is ticking.
Problems have only gradually surfaced. In the first phase, developing countries borrowed money, some of it from multilateral institutions, some from individual countries and some of it from the private sector.
At the time, this seemed relatively safe because the world economy was growing and demand for the commodities produced by low-income countries was strong. The assumption was that debt interest payments…
