Abstract
Without aggressive policy action, the COVID-19 (coronavirus) pandemic could turn into a protracted debt crisis for many developing countries. The note puts forward concrete proposals to expand on the G20 bilateral debt moratorium and to facilitate investments in recovery and the SDGs, including for highly-indebted middle-income countries that request a standstill, and by bringing in other creditors. Time gained by the standstill must be used to develop sustainable solutions to the debt challenges of developing countries—to ‘build back better’. Such debt relief should be part of broader financing and recovery strategies that take SDG investment needs into consideration, for example through country-led Integrated national financing frameworks. This is also the the time to also address long-standing gaps in the international financial architecture for sovereign debt.
- 18 Jun 2020