Debt crisis

A footbridge runs on high, wooden stilts over a lake, with people walking across it.

How Debt Relief Can Support Development Efforts for over 1 Billion People

How can emerging market and developing economies (EMDEs) mobilize the necessary financing to achieve the 2030 Agenda and the Paris Agreement without compromising their debt sustainability or indeed, solvency?

By Marina Zucker-Marques

Defaulting on Development and Climate

Report

As this report shows, many countries will face insolvency problems if they seek to ramp up investment to meet climate and development goals.

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Luftaufnahme einer Welle aus türkisem Wasser, die sich auf einem sandigen Strand bricht

The global south’s debt crisis is thwarting climate ambition

Analysis

Many climate-vulnerable countries cannot invest in low-carbon development unless they are offered debt relief. Policymakers must agree to reform the debt architecture and provide more concessional finance.

By Maria Fernanda Espinosa and Rishikesh Ram Bhandary

Grüne Bäume in der Nähe des Flusses während des Tages

The global debt crisis in many developing countries and its interconnectedness with the climate crisis

Analysis

In the climate negotiations at COP28, the question of financing the climate crisis will be at the forefront of the debate. However, many countries in the Global South are struggling to channel extra funds into climate action, due to the unfolding debt crisis.

By Sarah Ribbert

Debt Relief by Private Creditors: Lessons from the Brady Plan

Debt Relief for Green and Inclusive Recovery Project

This paper 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.

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Barbara Unmüßig, Stiftungs-Vorstand der Heinrich-Böll-Stiftung

“The Pandemic Is Deepening the Divide"

Interview

For the highly indebted developing countries, the corona pandemic accelerates the debt crisis. An interview with Barbara Unmüßig from the Board of the Heinrich Böll Foundation about the latest developments.

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