Overcoming the “great finance divide”

Fiscal constraints in developing countries are driving a widening “pandemic recovery gap” that threatens achievement of the Sustainable Development Goals (SDGs). Developed countries have been financing a large-scale response to the COVID-19 pandemic at historically low interest rates. Many developing countries—faced with significantly higher borrowing costs in, and intermittent access to, international financial markets—have been more hamstrung in their response. This so-called “great finance divide” contributed to developing countries’ diminished ability to finance an appropriate response to a historic shock. If left unaddressed, it will further exacerbate the divergence in development prospects, and pandemic scarring will fatally undermine achievement of the SDGs.

Sustainable Development Goals:

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