Trading Places: HIPCs and HIICs

I thought of the movie Trading Places when I saw the term HIIC in the headline of today's Wall Street Journal article by Kelly Evans. The new term refers to the "Heavily Indebted Industrialized Countries" and of course to the exploding debt of these countries--including the United States. It was not so long ago that the main concern in the international community was the debt of the "Heavily Indebted Poor Countries," or the HIPCs; these low income countries were the focus of the debt relief, or the "drop the debt," movement.

Remarkably the debt of the advanced countries is now higher and growing more rapidly than the debt of the lower income countries, as I show in this chart based on data from the IMF's Fiscal Monitor of last May. The switch seemed to take less time than it took to change the P to an I. It's good news for the lower income counries, but not such good news for the industrialised countries which obviously have to get back on track.