Wealthy west has little excuse after finally waking up to global debt crisis

theguardian.com:

A fter a decade or more in which they have been obsessed with their own problems, countries in the wealthy west are starting to wake up to the risk of a looming debt crisis in the poorer parts of the world.

This week’s gathering of the International Monetary Fund and World Bank in Washington has been marked by a discussion about what to do about countries that are known to be in debt distress or on the brink of it.

So the good news is that debt has climbed back up the policy agenda and is seen as a problem that needs sorting. The managing director of the IMF, Kristalina Georgieva, has been particularly keen to stress that need to assist struggling countries while there is still time.

“I would like to make a double plea on their behalf: help them handle the burden of debt, which was made so much harder by the shocks of the past years; and secondly, help ensure that the IMF continues to be in a position to support them in the years ahead,” she said in a speech before this week’s gathering.

The bad news is that Georgieva’s plea is yet to be heeded. Wealthy countries are still primarily concerned with their own problems. The geopolitical rivalry between the US and China is also not helping. Creditor countries may be waking up to the idea that there is a problem with debt, but they are a long way from finding a solution. Talk is not being matched by action.

“Nothing will happen this week,” says Matthew Martin, the director of the campaign group Debt Relief International. “But while nothing happens the crisis will get worse and worse.”

Achim Steiner, the administrator of the UN Development Programme, says there are more than 50 countries on his radar, which could “be in debt default very quickly”.

Comparisons are already being drawn