Developing Country Debt Hits Record 9.4 Trillion Dollars
The World Bank reports developing country debt reached a record 9.4 trillion dollars, prompting the UK to propose a new global debt regime.
Debt owed by developing countries reached a record 9.4 trillion dollars last year, a 5.5% increase and the fastest growth in four years. The World Bank reports that rapid private sector lending drove this surge, leaving the poorest nations facing average interest rates of 8.2% on new borrowing, the highest level since the late 1980s.
High servicing costs are currently hindering long-term development and reducing food security. Specific nations are facing particularly high rates, including the Republic of Congo at 13.88%, Laos at 11.5%, and Kenya at 9.2%.
In response, the United Kingdom is preparing a new drive on debt for its upcoming G20 presidency. Prime Minister Andy Burnham has appointed Gordon Brown to examine changes to the global debt regime, linking the effort to confronting the legacy of slavery. Foreign Secretary Ed Miliband proposed a new deal to mobilize multilateral development bank balance sheets to buy back outstanding debt and lower interest rates.
