When sorrows come, they come not single spies

Belize, Fiji and Mozambique (among many other countries) “owe staggering amounts of money to various foreign lenders. They face staggering climate risks, too. And now, with the coronavirus pandemic pummeling their economies, there is a growing recognition that their debt obligations stand in the way of meeting the immediate needs of their people — not to mention the investments required to protect them from climate disasters.”

One thought on “When sorrows come, they come not single spies

  1. Haven’t we seen this movie every few decades? Indeed, it may be that all the players know there’s a script. Of course, those loans can’t be paid back. OTOH, the debtors weren’t making their payments already, so the world economy can do just fine if we vaporize the debt. The problem is that the lenders are carrying the loans on their books as if they’ll get paid back, and all sorts of regulatory problems will hit them if they have to admit they won’t get their money back. More fiercely, the debtors want to pay less interest than what interest they’ve been able to pay in the past.

    And for the script, now is a great moment, since their economies have been hurt by the great world-wide disaster so nobody will ask too fiercely the obvious questions, Why did you borrow so much money? Why did you lend so much money? But a trillion or so dollars isn’t that large in the global lending market, so the pain will be shared out among all the players more or less based on their ability to bear it.

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