As Sri Lanka has shown, the world economy is in for a Micawberesque period

Mr and Mrs Micawber and the twins in 'David Copperfield'. Ink and wash drawing by Fred Barnard in the 1870s. Public domain

In this decade, we’ve seen five countries go bankrupt, or pretty much bankrupt for all practical purposes. Greece. Lebanon. Zambia. Suriname. Sri Lanka.

Meanwhile, Tunisia and Pakistan are being closely watched. Their status is that of patients in intensive care.

Tunisia’s public debt has more than doubled from 39 per cent of GDP in 2010, and the government is forced to shell out large sums to service that debt, prompting concerns that Tunisia will go the way of Lebanon and default. Pakistan got a $6 billion bailout from the International Monetary Fund (IMF) on July 14 to avoid default.

As the pandemic slowly makes its way into the world’s rearview mirror, many emerging markets face a combination of high debt, low currency reserves, falling revenue and rising prices.

Sri Lanka epitomises this. The 2009 end of its civil war propelled it to the front of the line for chea…