WHO GAINS FROM BALLOONING DEBT?

Rising interest and falling exchange rates are driving capital back to developed nations—and closing doors to credit for developing countries

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THE MOUNTING debt burden of the developing world has reached a stage where it has completely reversed the North-South resource flows. According to the World Bank International Debt Statistics, developing countries experienced a net resource outflow when they could least afford it. In 2022 and 2023, developing countries cumulatively paid $38.5 billion more to their external creditors than they received in fresh disbursements, resulting in a negative net resource transfer. No other statistics could make a greater mockery of the rich world's idea of itself as a benefactor of the developing world. As experts point out, this reverse flow of resources is not only immoral but it is a major contributing factor to continued poverty and environmental degradation in poor countries, where economic resources have to be exploited quickly, simply to pay off debt.