Delays in developing an enhanced framework for sovereign debt restructuring are preventing distressed countries from ensuring sustainable sovereign debt stocks and regaining access to international capital markets, leaving their sovereign credit ratings in default or near a default grade for longer periods. This adds to the human costs of default, contributing to risk of a lost decade of economic development.
Aligning how low and middle-income sovereign borrowers restructure debt owed to todays more diverse array of creditors involves more protracted negotiations. Finding common ground between China and private investors for sharing information and fair treatment (Figure 1) is challenging. Multilateral creditors preferred credit status…
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