All articles tagged with #poor countries
The World Bank warns that the debt costs of poor countries are reaching "crisis" levels, posing significant financial risks. The burden of debt is becoming increasingly unsustainable for these countries, with rising interest rates and declining economic growth exacerbating the problem. The World Bank calls for urgent action to address the issue and prevent a potential debt crisis.
A dozen of the world's poorest countries are facing economic instability and even collapse under the weight of hundreds of billions of dollars in foreign loans, much of them from China. Paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel. And it’s draining foreign currency reserves these countries use to pay interest on those loans, leaving some with just months before that money is gone. Two of them, Zambia and Sri Lanka, have already gone into default, unable to make even interest payments on loans financing the construction of ports, mines and power plants.
China is in talks with a group of poor countries to reach a compromise on their debt, as the countries struggle to repay loans amid the pandemic. The negotiations involve extending the repayment period and reducing interest rates. The move comes as China faces criticism for its lending practices in developing countries, which some say lead to debt traps and undermine their sovereignty.