Pandemic debt leads to global reckoning
SAN JOSE, Costa Rica - This nation built Latin America's model society, enacting universal health care and spending its way to one of the Western Hemisphere's highest literacy rates. Now, it's reeling from the financially crushing side effects of the coronavirus as cratering revenue and crisis spending force a reckoning over a massive pile of government debt.
The pandemic is hurtling heavily leveraged nations into an economic danger zone, threatening to bankrupt the worst-affected. Costa Rica, a country known for zip-lining tourists and American retirees, is scrambling to stave off a full-blown debt crisis, imposing emergency cuts and proposing tighter measures that touched off rare violent protests last fall. To keep the lights on, an eco-friendly nation is weighing desperate solutions - including open-pit gold mining, even oceanic fracking.
"Costa Rica is facing a social crisis," said Ana Rosa Ruiz, an economist at the Costa Rican Technological Institute.
Around the globe, the pandemic is racking up a mind-blowing bill: trillions of dollars in lost tax revenue, increased spending and new borrowing set to burden the next generation with record levels of debt. In the direst cases - low- and middle-income countries, mostly in Africa and Latin America, that are already saddled with backbreaking debt - covering the rising costs is transforming into a high-stakes test of national solvency.
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