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The Big Take

Historic Cascade of Defaults Is Coming for Emerging Markets

Number of developing nations trading distressed has doubled, with El Salvador, Ghana, Egypt, Tunisia and Pakistan appearing particularly vulnerable.

Protesters march towards the Presidential Palace during a demonstration over soaring living costs in Accra, Ghana, on June 29.

Protesters march towards the Presidential Palace during a demonstration over soaring living costs in Accra, Ghana, on June 29.

Photographer: Nipah Dennis/AFP/Getty Images

A quarter-trillion dollar pile of distressed debt is threatening to drag the developing world into a historic cascade of defaults.

Sri Lanka was the first nation to stop paying its foreign bondholders this year, burdened by unwieldy food and fuel costs that stoked protests and political chaos. Russia followed in June after getting caught in a web of sanctions.