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Geopolitical tensions beginning to enter debt talks

Investors’ concerns about sovereign debt risks in frontier markets have eased a touch recently but several countries, particularly Tunisia and Pakistan, remain on the path to default. The latest (and last-minute) demands from China in debt talks with Zambia and Sri Lanka highlight that negotiations to restructure debts will be long and arduous, and also suggest that talks may become increasingly adversarial between the West and China.

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