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Bretton Woods Project: G20 proposal continues to favour creditors

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.

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Press

Moritz Kraemer Discusses Climate-Driven Credit Rating Downgrades at CNBC

Moritz Kraemer, Senior Advisor to the Debt Relief for a Green and Inclusive Recovery Project and contributor to our report, highlighted that “the vast majority of sovereigns will suffer from climate change in a way that their ratings will be cut.”

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G20’s Turn to Lead on Debt Relief for a Global Recovery

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).

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Alivio de la Deuda Para Una Recuperación Verde E Inclusiva: The DRGR Proposal Is Now Available In Spanish

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.

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The G20’s Missed Opportunity

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.

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New York Times Refers to DRGR in Comprehensive Article on Green Debt Relief

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.

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DRGR-Idea Reaches Central Players: IMF and World Bank To Present ‘Green Debt Swaps’ Option by November

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.

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“Nature” Finds “Climate Change Imperils Countries’ Ability to Repay”

“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.

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“NewClimate Institute” Paper Examines Climate-for-Debt Swaps, Referring to DRGR

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.

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Ulrich Volz Presents DRGR Ideas in Report by Boston University

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.