Linking Debt Relief and Sustainable Development:  Lessons from Experience – Background Paper #2

Linking Debt Relief and Sustainable Development: Lessons from Experience

Background Paper #2
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The Covid-19 crisis has dealt a blow to developing-country economies, which were already facing rapidly rising debt burdens, calling into question their ability to scale-up climate investments. As the international community considers a menu of options to address the rising prospect of widespread debt distress and defaults in the developing world, it will be crucial that it weighs how such options can best contribute towards addressing the equally urgent climate crisis. Having that need in mind, the current paper examines the experience with debt-for-development swaps and major debt relief processes in order to draw some lessons that could help shape a debt-for-climate initiative (DCI). It concludes that, in order to significantly expand the fiscal space and create the incentives for investing in climate change adaptation and mitigation, a DCI would have to be a transaction capable of combining debt cancellation and swaps in creative ways. It also makes some recommendations to ensure the scheme reaps the benefits that swaps and debt relief have proven they can bring, while avoiding some of their identified shortcomings.

>> More about the „Debt Relief for Green and Inclusive Recovery“ initative

 

 

 

 

 

 

Product details
Date of Publication
December 2020
Publisher
Heinrich-Böll-Stiftung
Number of Pages
50
Licence
Language of publication
englisch
Table of contents

Abbreviations     
Abstract     
Executive Summary
Linking Debt Relief and Sustainable Development:     
Lessons from Experience for a Debt-for-Climate Initiative      
1 Introduction to Debt Swaps, History, and Recent Proposals     
2 Debt Swaps Experience and Lessons Learnt     
2.1 Financial considerations     
2.2 Governance and administration     
2.3 Ownership and policy coherence     
3 Lessons from the HIPC Initiative and the MDRI     
4 Conclusions     
Annexes     
References     
Author’s Bio

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