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Preventing Developing-Economy Debt Disasters

Skyrocketing food and energy prices, together with widening sovereign bond spreads, have placed balance sheets in emerging-market and developing economies under severe strain. To avoid disaster, the international community must urgently support bold debt restructuring.

ABIDJAN/CAIRO – The world’s breadbasket is being wrecked by war. Ukraine and Russia together account for 30% of global wheat and barley exports, and they are leading exporters of other grains. The two countries also are the source of nearly 70% of the world’s sunflower oil exports, while Russia accounts for 13% of all crude petroleum exports. As the conflict in Ukraine rages and sanctions on Russia escalate, food and energy prices – which were rising even before Russia invaded Ukraine – are spiking in countries far away from the front lines, with devastating implications for the world’s poor.