As private creditors now hold over 60 per cent of developing country debt, credit rating agencies have emerged as systemically necessary actors in the international financial architecture. Yet, as Dr. Daniel Cash, Senior Fellow at UNU-CPR, argues in OPEC Fund Quarterly, sovereign engagement with these agencies remains deeply asymmetric – marked by narrow windows of interaction and limited transparency.
Cash makes the case for a structured, voluntary framework that would allow governments – particularly those across the Global South – to better contextualize their reform narratives and resilience strategies. His proposal includes thematic peer forums and a light-touch charter that would safeguard confidentiality, ensure procedural fairness and avoid any interference in rating agency independence.
“Developing countries’ average interest paid on external borrowing is now three times higher than that of developed countries,” Cash notes. "When you consider that a one-notch rating improvement can save millions in borrowing costs, even modest investments in better engagement pay for themselves.”
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