Introducing the Sovereign Vibe project in this first blog post, for your reading pleasure.
What is Sovereign Vibe?
Sovereign Vibe is a data-focused blog designed to provide actionable insights on emerging markets sovereign debt, global macroeconomics, and capital markets. And by “emerging markets” and “global macroeconomics,” what I really mean is that this blog will cover emerging, frontier, and developing economies, or at least to the extent my one-person bandwidth permits.
My preferred catch-all term for this is one that the International Monetary Fund also uses: emerging and developing economies (EMDEs). Since EMDEs are greatly affected by what happens in advanced economies (AEs), I’ll also be exploring some relevant developments in the US and other wealthy countries whenever I deem useful.
This is a project that I have wanted to do for a long time, for at least two reasons. The first is that what should be easily-accessible sovereign debt data often requires some wrangling before useful information can be extracted from it. The second is that narratives on EMDEs are too often siloed, with limited cross-referencing among the commentariat comprising development experts, policymakers, investors, bankers, lawyers, journalists, activists, and geopolitical strategists. Generating fresh insights from data and bringing diffuse analysis together should provide some big-picture value to the reader. If you agree, please consider subscribing below for free newsletter email updates.
What do you mean by data?
Well, here’s an example. The chart below shows the outstanding external public and publicly-guaranteed debt stock of 68 Low-Income Countries (LICs), a subset of the EMDEs. This data comes from the World Bank’s well-known International Debt Statistics database and covers the countries eligible for the G20’s Debt Service Suspension Initiative (DSSI), which made it possible for these countries to delay servicing some of their external public debt during the pandemic in 2020 and 2021. In fact, 73 countries were eligible, but data is unavailable for five of them. I’ll cover the DSSI and its successor policy, the so-called Common Framework in more detail in future posts.
For now, as you can see, these poor countries amassed a lot of external sovereign debt in the 2010s, with the greatest increases coming in the form of private credit and non-concessional official lending. This latter type is of both the multilateral and bilateral variety, with “bilateral non-concessional” overlapping to a large extent with Chinese loans. Private and non-concessional is a pretty expensive mix for these borrowers, given the interest rates on those types of debt…but more on that some other time.
To get a clear breakdown of this data, check out the Sovereign Vibe DataHub, which features as its inaugural dashboard the decomposition of DSSI-eligible countries’ external public debt stock by borrowing country, creditor country, and creditor type.