First, burden sharing cannot be applied universally. It does not have much meaning in countries with stronger fundamentals, more advanced structural reforms, and true prospects of maintaining long term capital inflows. Second, burden sharing and contagion cannot be treated separately, as the post Russian crisis has made evident. The risks are too high and the disruptions may be too acute. When markets are moved by panic, everybody loses.
Societies pay a price and long term investors are severely hit.
In Latin America, healthy corporations which before the Russian crisis had regular access to financing paying reasonable spreads saw their relations with the markets suddenly halted. These companies did not change, the country environment in which they operate did not change, but they were penalized by action beyond their control. Of course it is up for the private sector to make its own decisions and the right risk assessments when it embarks into international financing. The obligation to fight contagion is not different from the obligation to maintain a safe and well regulated economic reality at home. The need to work more decisively on contagion is even more important when we recognize that open economies, with a tradition of relations with the market do not want to resort to unilateral solutions such as moratoria or suspension of payments, capital or exchange controls.