The efforts to support low income countries (LICs) with unsustainable debt burdens do not go far enough, the DRGR authors Kevin Gallagher, Shamshad Akhtar, Stephany Griffith-Jones, Ulrich Volz and Moritz Kraemer argue in a text published on the online presence of the Italian Institute for International Political Studies (ISPI).
Originally published in November 2020 by the Heinrich Böll Foundation; the Center for Sustainable Finance at SOAS, University of London; and Boston University’s Global Development Policy Center, the DRGR report is now also available in Spanish translation.
The report “Debt Relief for Green and Inclusive Recovery” proposes that low and middle-income countries with unsustainable debt burden receive substantial debt relief by public and private creditors, in order to provide fiscal space for investment in Covid-19-related health and social spending, climate adaptation and green economic recovery strategies.
At “Project Syndicate”, the DRGR authors Shamshad Akhtar, Ulrich Volz, Moritz Kraemer and Stephany Griffith-Jones warn against dangerous shortsightedness in sovereign-debt restructurings and suggest steps for comprehensive debt relief oriented around a green, inclusive recovery.
In the midst of the annual Spring Meetings of the International Monetary Fund and the World Bank Group, the NY Times published an article on the “systemic risk” debt and climate change pose on the world economy, quoting the DRGR proposal.
As reported by Reuters, IMF Managing Director Kristalina Georgieva said “green debt swaps have the potential to spur accelerated action on climate change in developing countries”, announcing appropriate instruments by November.
“Nature”, a weekly international journal distributing peer-reviewed research, published an analysis that warns against the risks of a severe debt crisis if climate change is not taken into account when governments lend money during the pandemic. The text suggests three steps that match the DRGR proposal.
According to a new report by the United Nations, the COVID-19 pandemic is threatening the fight against poverty and increasing global inequality. In its chapter on debt relief, the text refers to our proposal.
After five years, the cumulative increase in real GDP associated with investments in green energy infrastructure is nearly twice as high as that on spending on non-ecofriendly energy. Findings like these highlight the importance of a post-COVID-19 sustainable recovery not only from an environmental but also an economic perspective.
The Centre for the Studies of the Economies of Africa (CSEA) together with the Heinrich Böll Foundation are hosting an online event on ‘Debt Relief for a Green and Inclusive Recovery in Nigeria?’ on Thursday, 8 April at 2 PM (WAT).
According to the briefing “A debt pandemic: Dynamics and implications of the debt crisis of 2020”, public debt of developing countries has increased from an average of 40 to over 60 percent of GDP within the last ten years. More than one-third of the increase took place in 2020 alone.