Debt, Climate, and Development in Asia and the Pacific: Breaking the Vicious Circle
July 2025
A new Asian Development Bank Institute working paper by Ulrich Volz, Shamshad Akhtar, and Alex Dryden examines how the debt vulnerabilities in the Asia and Pacific region are worsening—driven by climate disasters and structural development gaps. It highlights how unsustainable debt burdens threaten sovereign fiscal stability and undermine the ability of developing economies to meet their climate goals. The authors call for concerted efforts to proactively tackle sovereign debt problems—efforts that, in some cases, will require significant debt relief as a pathway to sustainable growth.
Africa’s Inconvenient Truth: Debt Distress and Climate-Resilient Development in Sub-Saharan Africa
August 2023
Due to multiple external shocks since the outbreak of the COVID-19 pandemic, sub-Saharan Africa (SSA) is facing acute debt distress and new highs in the cost of foreign capital. Concomitantly, the region needs to mobilize a stepwise level of financing to meet shared climate and development goals, under the Paris Agreement climate targets and the UN 2030 Sustainable Development Goals (SDGs). Do SSA countries have the fiscal space necessary to achieve the Paris Agreement commitments and SDGs while also servicing their external debt?