The financial fate of developing countries often hangs on the assessments of a few powerful credit rating agencies. UNU-CPR senior fellow researcher Daniel Cash reveals how agencies not only influence borrowing costs but have created a "credit rating impasse" where countries avoid seeking much-needed debt relief for fear of devastating default ratings.
The article identifies two key reform approaches: building credit rating capability in the Global South and enhancing countries' capacity to engage with existing agencies. He argues that South Africa's assumption of the G20 Presidency presents a valuable opportunity to advance these reforms and champion a global credit rating capacity building initiative—shifting power dynamics in global finance from crisis response to structural empowerment.
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