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In February, even before the coronavirus hit, the International Monetary Fund was warning Saudi Arabia and the United Arab Emirates that by 2034 they would be net debtors to the rest of the world. That prediction was based on a 2020 price of $55 per barrel. At a price of $30, that timeline will shorten. And even in the Gulf there are weak links. Bahrain avoids financial crisis only through the financial patronage of Saudi Arabia. Oman is in even worse shape. Its government debt is so heavily discounted that it may soon slip into the distressed debt category

The economic profile of the Gulf states is not, however, typical of most oil-producing states. Most have a much lower ratio of oil reserves to population. Many large oil exporters have large and rapidly growing populations that are hungry for consumption, social spending, subsidies, and investment

Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices

Ecuador is the second Latin American country after Argentina to enter technical default this year.

Populous middle-income countries that depend critically on oil are uniquely vulnerable. Iran is a special case because of the punitive sanctions regime imposed by the United States. But its neighbor Iraq, with a population of 38 million and a government budget that is 90 percent dependent on oil, will struggle to keep civil servants paid.

Algeria—with a population of 44 million and an official unemployment rate of 15 percent—depends on oil and gas imports for 85 percent of its foreign exchange revenue

The oil and gas boom of the early 2000s provided the financial foundation for the subsequent pacification of Algerian society under National Liberation Front President Abdelaziz Bouteflika. Algeria’s giant military, the basic pillar of the regime, was the chief beneficiaries of this largesse, along with its Russian arms suppliers. The country’s foreign currency reserves peaked at $200 billion in 2012. Spending this windfall on assistance programs and subsidies allowed Bouteflika’s government to survive the initial wave of protests during the Arab Spring. But with oil prices trending down, this was not a sustainable long-run course. By 2018 the government’s oil stabilization fund, which once held reserves worth more than one-third of GDP, had been depleted. Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. A strict COVID-19 lockdown is containing popular protest for now, but given that the fragile government in Algiers is now bracing for budget cuts of 30 percent, do not expect that calm to last.

Before last month’s price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds were this week trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default. Because servicing its debts requires a share of public spending six times larger than that which Angola spends on the health of its citizens, the case for doing so in the face of the COVID-19 crisis is unarguable.

Faced with the price collapse of 2020, Finance Minister Zainab Ahmed has declared that Nigeria is now in “crisis.” In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages

The price surge of the 1970s and the nationalization of the Middle East oil industry announced the definitive end of the imperial era. The 1980s saw the creation of a market-based global energy economy. The early 2000s seemed to open the door on a new age of state capitalism, in which China was the main driver of demand and titans like Saudi Aramco and Rosneft managed supply

The giants such as Saudi Arabia and Russia will exploit their muscle to survive the crisis. But the same cannot so easily be said for the weaker producers. For states such as Iraq, Algeria, and Angola, the threat is nothing short of existential.

Beijing has so far shown little interest in exploiting the crisis for debt-book diplomacy. It has signaled its willingness to cooperate with the other members of the G-20 in supporting a debt moratorium.

In a century that will be marked by climate change, how useful is it to restore profits and prosperity based on fossil fuel extraction?

The shock of the coronavirus is offering a glimpse of the future and it is harsh. The COVID-19 crisis drives home that high-cost producers are on a dangerously unsustainable path that can’t be resolved by states propping up their uncompetitive oil sectors. Even more important is the need to diversify the economies of the truly vulnerable producers in the Middle East, North Africa, sub-Saharan Africa, and Latin America.

In the midst of this global energy crisis, African leaders have argued that their nations should also be allowed to ramp up fossil fuel use to improve domestic energy access—given they had contributed so little to historic carbon emissions. Indeed, 43 percent of Africa’s 1.4 billion people still lack access to electricity. As a result of soaring energy prices, the number of people without access to energy across Africa rose for the first time in decades, threatening to erode all gains made. According to the International Energy Agency, around 1 billion Africans will still rely on dirty fuels, such as firewood, for cooking in 2030. However, Western governments demanded that multilateral lenders, such as the World Bank, stop funding fossil fuel projects to reduce global carbon emissions.

Egypt, Africa’s second-largest economy, agreed on Oct. 27 to a $3 billion bailout from the International Monetary Fund (IMF). It was the country’s fourth since Abdel Fattah al-Sisi took power in a coup in 2013, making Egypt the IMF’s second-largest debtor after Argentina. Long a top choice for emerging market investors, Egypt had become heavily dependent on hot money, but investors panicking over the war in Ukraine pulled around $20 billion out of Egypt between February and March.

Inflation in Ghana rose to 15.7 percent in March as the Ghanaian currency lost 16 percent of its value against the dollar, prompting protests in June over the soaring cost of living.

Africa is seeking more than just climate reparations as it looks to transform the global system. African leaders want a permanent seat for the African Union at the G-20, two seats on the U.N. Security Council, and a reordering of global tax rules under the United Nations.

2022 was a year for the restitution of Africa’s historical artifacts stolen by colonial powers. The Smithsonian Institution agreed to return its collection of Benin Bronzes and placed legal ownership with Nigerian authorities. In July, Germany handed back two bronzes and put more than 1,000 other items into Nigeria’s ownership while a digital database—known as Digital Benin, which documents Western museums’ existing collection of Benin’s artifacts—was unveiled in November. Despite this progress, there are still unanswered calls for the British Museum, the largest holder of Benin Bronzes, to return its loot. In September, the world marked the 200th anniversary of the deciphering of the Rosetta Stone, a fragment of written decrees issued by Egyptian priests during the reign of Ptolemy V (204 to 180 B.C.). Egyptian scholars and archaeologists renewed their demand for the stone’s return, which has been housed at the British Museum in London since 1802. Their call has garnered more than 135,000 signatures on an online petition.

An online archive to showcase Mali’s cultural history was launched in March, digitizing more than 40,000 of Timbuktu’s ancient manuscripts, some dating to the 12th century and originally written in medieval Arabic but translated to several languages in an online platform. Malian librarians and their assistants secretly transported hundreds of thousands of documents into family homes in a bid to save them from destruction by jihadis. Through those efforts, some 350,000 manuscripts from 45 libraries across the city were kept safe.