In early October 2023, Oxfam put out a press release with the headline, “world’s poorest countries to slash public spending by more than $220 billion in face of crushing debt.” This headline has alarming implications for political stability, considering that austerity and unrest have been shown to have a strong correlation. In general, despite dramatic examples in Ecuador and Sri Lanka, austerity appeared to play a relatively small role in global protest in 2022 and 2023, when nearly 80% of countries either held government spending constant or increased expenditures. 2024 appears likely to be a different story, as governments struggle to manage unsustainable debts. The current emerging market debt crisis could be compounded by social unrest.
Learn more here: https://www.wtwco.com/en-ca/insights/2023/12/how-will-the-debt-crisis-impact-countries-political-stability
