Comments

1. Pierce R. Butler says

   May 18, 2023 at 11:40 am

   OT (except for the interconnectedness of international finance in general): China’s loans pushing world’s poorest countries to brink of collapse:

   A dozen poor countries are facing economic instability and even collapse under the weight of hundreds of billions of dollars in foreign loans, much of them from the world’s biggest and most unforgiving government lender, China.

   …Countries in AP’s analysis had as much as 50% of their foreign loans from China and most were devoting more than a third of government revenue to paying off foreign debt. Two of them, Zambia and Sri Lanka, have already gone into default…

   Since Sri Lanka defaulted a year ago, a half-million industrial jobs have vanished, inflation has pierced 50% and more than half the population in many parts of the country has fallen into poverty.

   Experts predict that unless China begins to soften its stance on its loans to poor countries, there could be a wave of more defaults and political upheavals. …

   The US Federal Reserve’s interest rate hikes have played a significant role in exacerbating the (still-expanding) crisis: more at the link.