Lingering debt danger: External debt levels dangerously high globally

During the pandemic, another contagion besides Covid-19 threatened to ravage the world: A sovereign debt crisis. Several indebted countries, including many in Africa and also one in India’s neighbourhood, seemed on the brink of a default. That immediate threat of default and destabilisation receded, and the subject of sovereign debt was quietly deprioritised in global governance. But a recent World Bank report shows that might have been a mistake. The International Debt Report (IDR) makes for a disturbing read.

 

The IDR focuses specifically on external debt and classifies countries by income level. For low- and middle-income countries in general, the