Beware the vultures.

As the world economy continues to reel from the economic aftershocks of coronavirus (Covid-19), there has been a mounting pressure on countries, particularly in the developing world, to stave off a debt-induced collapse in their fiscal positions.

The comparatively meagre resources of developing countries mean that they are less capable of withstanding the economic paralysis that accompanies a domestic lockdown or global financial deadlock. For this reason, an international appeal has been made to creditors for a moratorium on debt payments from developing countries.

This movement has been led by Pakistan, which over the past 70 years has been a champion of the causes of the developing world. As its recently announced budget reveals, roughly 40 per cent of the government's fiscal capacity will be allocated towards domestic and foreign debt servicing.

In other words, nearly half of the government's resources are immediately unavailable for grappling with the momentous crisis of coronavirus. This raises a humanitarian question: should creditors really be raking in their interest and principal payments when there is a risk of mass starvation and pauperization in the Third World?

Pakistan's strong advocacy has yielded fruit, in the sense that G20 creditor countries have expressed a willingness to defer the debt obligations of developing countries for the immediate period. Pakistan has also been included in the list of countries qualifying for debt relief.

The G20 governments realise that too great a debt burden in such dire circumstances will delay a global recovery, and push hundreds of millions into the sort of poverty from which no easy recovery will be possible. The interconnectedness of the modern economy means that the hardships in the developing world will ultimately bear out on the developed world in no small part. But this is the element of public debt on the balance sheets of the Third World. There is, in fact, another swarm of creditors that is scarcely bound by high minded ideals. These are called the 'vultures' in common financial parlance, and represent the hedge funds and other big finance players that profit off of the misery of the world's poor. These vultures are companies that have purchased the debt of distressed countries at a steep discount, and then attempt to gut countries for their assets to make handsome returns off the backs of societies with already insufficient resources to save their own people.

Vultures are now...