Current issues related to the external debt of developing countries

Large capital inflows are often seen as a sign of economic strength of a receiving country, and are sometimes cited as evidence of good institutions and investment opportunities. By contrast, large external debts are usually viewed as a sign of weakness, and developing countries are concerned about the accumulation of such debt. There is a lack of coherence in these perceptions, since debt accumulation is the natural consequence of large capital inflows, unless they take the form of grants or equity flows.

Sustainable Development Goals:

Decent Work and Economic Growth

Partnerships for the Goals