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Private lending and debt risks of low-income developing countries - 9 March 2022

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Low-income developing countries (LIDCs) are greatly affected by the coronavirus pandemic, and sovereign debt has become a major concern.

The International Monetary Fund (IMF) already classified 44% of LIDCs as being in debt distress or at risk of it before the Covid-19 crisis began. One major feature of the current situation, which is unlike previous episodes of LIDC debt problems, is the extent of borrowing from private sources.

This report is a timely investigation into the risks that this new wave of private borrowing may cause for LIDCs. It draws three major conclusions for LIDCs and the international community in the coming years when debt issues are likely to dominate their economic policy-making:

  1. The costs and availability of borrowing are linked to global financial conditions, and therefore solutions that focus on domestic adjustment are misdirected, especially in the context of the global health emergency.
  2. The fact that developing countries have borrowed extensively from international private creditors will complicate debt-restructuring efforts, and introduces several minefields on the road ahead.
  3. Standstills and debt restructurings must be comprehensive and include private as well as public creditors if they are to work for all countries.

About the speakers

Christina Laskaridis is a Lecturer in Economics at the Open University School of Social Sciences & Global Studies with a PhD in Economics from SOAS, University of London. She works on the nature of economic expertise in historical perspective, in particular the political economy of sovereign debt, international organisations and monetary and debt debates.

Christina co-convenes the Politics of Economics seminar series at the University of Cambridge and was a Research Fellow at Duke University’s Center for the History of Political Economy.

Bruno Bonizzi is Senior Lecturer in Finance at Hertfordshire Business School. He holds a PhD in Economics from SOAS, University of London. His research focuses on financial integration and financialisation, with reference to institutional investors and developing and emerging economies.

His work is published in several book chapters and journals such as Environment and Planning A, the Socio-Economic Review, Development and Change and the Journal of International Financial Markets, Institutions and Money. He recently co-edited a collective volume by Routledge, on Emerging Economies and the Global Financial System: Post-Keynesian Analysis.

 


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Event details

9 March 2022

Online event

ewa.karwowski@kcl.ac.uk