“Five ways to align debt with climate and development goals”: Katie Gallogly-Swan, Rebecca Ray and B. Alexander Simmons from the Boston University Global Development Policy Center published an Op-Ed on the web presence of the “World Economic Forum” quoting the DRGR project.
The South Asian nation reveals its plans to both tackle climate change and debt with green financing.
Due to its immense debt burden aggravated by the COVID-19 pandemic, the East African country plans to approach creditors for suspension of repayments. After Ethiopia, Zambia and Chad, Uganda is another cautionary example of the debt crisis the Global South is about to face.
A recently published blueprint by the Climate Policy Initiative (CPI) examines the existing interventions on providing debt relief, highlighting that middle-income countries do not get the needed support to revive growth and climate action. It, therefore, proposes eligibility and condition criteria for Debt for Climate Swaps.
Prior to the virtual meeting of 40 world leaders around Earth Day, the concept of debt relief for a green and inclusive recovery played a prominent role in numerous articles. Still, the White House itself seems to have missed the opportunity to address it appropriately.
The Bretton Woods Project is a civil society network hosted by ActionAid. It envisions a global economic system that operates on the primary principles of justice, equity, gender equality, human rights and environmental sustainability, with international institutions that are democratic, inclusive, transparent, accountable, and responsive to citizens, especially the poorest and most vulnerable.
In a recent posting, it evaluates the G20 ‘Common Framework for Debt Treatments”. It starts with a quote from Gordon Brown’s speech at the launch of the report ‘Debt Relief for a Green and Inclusive Recovery‘: “despite the promises made by the G20, the IMF and the World Bank to stand behind them in their hour of greatest need,” the world’s poorest countries had “received only about a fraction of what they need in debt relief.”
Three main points summarise its critique:
- G20 announces disappointing common framework for debt restructuring
- Framework relies on much-critiqued IMF and World Bank debt sustainability analysis
- Debtor countries must agree to IMF treatment as condition of debt relief
Read yourself further on the website of the Bretton Woods Project.
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.
In the paper “Climate, COVID-19, and the Developing Country Debt Crisis” the research institute for climate policy examines the potential of climate-for-debt swaps and ways to define possible candidates.
A new report by the Boston University Global Development Policy Center examines existing proposals to combat COVID-19. It features a chapter by DRGR author Ulrich Volz that draws from our report.