Ahead of the climate conference (COP26) taking place in Glasgow later this year, a group of several activist networks – including Afrodad and Global Justice now – released a concentrated briefing on the dangerous simultaneity of the debt and climate crises.
The paper by DRGR authors Stephany Griffith-Jones, Kevin Gallagher, and Ulrich Volz reviews the main features of and experiences with the Brady Plan, which in 1989 laid the foundation for the restructuring of the sovereign debt of mainly Latin American countries. It argues that the combination of credit enhancement for restructured debt, moral suasion, and tax as well as regulatory relief to encourage private creditors to participate in debt restructurings may provide a template for addressing today’s sovereign debt problems.
Read Background Paper #7 here.
Mohamed Nasheed warns that without restructuring, the island nation can’t afford projects to protect its land and citizens.
The World Bank and IMF are likely to announce a new debt relief initiative at COP26, tying debt relief to Green investment. At the Centre for the Study of Financial Innovation (CSFI), DRGR-author Stephany Griffith-Jones explains our proposal as an alternative based on the Brady Plan that helped Latin America in the 1970s/80s, in which creditors would swap existing debt for guaranteed debt (with a haircut).
News organization “Quartz” quotes DRGR-authors Ulrich Volz and Kevin Gallagher in article on debt-for-climate swaps.
As the Global South grapples with a deadly pandemic and growing climate concerns, the United Nations Development Program estimates developing countries and emerging economies owe close to $1.1 trillion in debt service payments in 2021 alone. Comprehensive debt relief is needed to avoid this looming crisis, but existing relief structures, such as the G20’s Debt Service Suspension Initiative and Common Framework for Debt Treatments, fall short in meeting the severity of the moment.
On Monday, 28. June 2021 the Heinrich Böll Stiftung, the Centre for Sustainable Finance at SOAS University London and the Global Development Policy Center, Boston University hosted an expert webinar discussion and presentation of its new report. Read the full announcement of the event here.
Five of the authors of our proposal “Securing Private Sector Participation and Policy Space for Sustainable Development” – Shamshad Akhtar, Kevin P. Gallagher, Stephany Griffith-Jones, Moritz Kraemer and Ulrich Volz – presented its key elements and calls for action.
They were joined by the following keynote speakers:
- Alicia Bárcena Ibarra, Executive Secretary, United Nations Economic Commission for Latin America and the Caribbean
- José Antonio Ocampo, Professor of Professional Practice in International and Public Affairs and Director of the Economic and Political Development Concentration at the School of International and Public Affairs, Columbia University
- Louis Kasekende, Executive Director, Macroeconomic and Financial Management Institute of Eastern and Southern Africa
Read the Blog Summary on the discussion by Rebecca Ray, Global Development Policy Center, Boston University, here.
Full Video Recording
In the “Breakingviews” section at Reuters, our co-authors Shamshad Akhtar and Ulrich Volz write about the deceptive calm and misplaced optimism in debt markets. They point out the enormous hurdles that developing and emerging economies face in recovering from the COVID-19 pandemic and meeting key climate and development goals at the same time.
A proposal by Ulrich Volz, Shamshad Akhtar, Kevin P. Gallagher, Stephany Griffith-Jones, Jörg Haas and Moritz Kraemer.
The world’s largest news channel reports exclusively on our report, developed by the Boston University Global Development Policy Center, the Heinrich Boell Foundation and the Center for Sustainable Finance at SOAS University of London.