Debts

Latin America and the Caribbean stand at a crossroads of escalating debt, intensifying climate shocks, and stalled progress toward the Sustainable Development Goals. A new policy brief analyses the region's debt dynamics.

Across Africa, climate shocks and debt distress fuel each other in a vicious cycle. With external debt more than tripling since 2008, rising costs and plunging currencies are squeezing public finances - leaving little room for vital climate resilience investments. 

This policy brief details the challenging debt dynamics facing African nations and outlines several solutions that would improve their fiscal capacity to address the climate emergency and embark on a sustainable growth pathway.

As this report shows, many countries will face insolvency problems if they seek to ramp up investment to meet climate and development goals.

As the sovereign debt crisis in the Global South continues to unfold, the lack of involvement of multilateral development banks (MDBs) in debt relief efforts has become a contentious issue among major creditors. This report aims to contribute to the ongoing debate over debt relief negotiations and MDBs and makes policy recommendations how to include MDBs better in debt relief.

Climate-related shocks are becoming more frequent and severe. More than ever, countries must invest in climate resilience and just transitions, but for many emerging market and developing economies, high debt burdens put achieving climate and development goals out of reach. A new policy brief explains the proposal advanced by the Debt Relief for Green and Inclusive Recovery (DRGR) Project.

The report analyzes new data on the level and composition of sovereign debt for emerging markets and developing economies and its relationship to climate vulnerability. It estimates the size of debt restructuring and suspension necessary for countries in or at high risk of debt distress to achieve debt sustainability and put them on a path towards meeting their development goals and climate commitments.