Debt has always been associated with development and structural transformation. In the era of hyper-globalization, however, while debt has become a dominant driver of global growth it has failed to deliver a strong surge in productive investment, instead fueling financial speculation.?
In this environment, developing countries have seen debt transformed from a long-term financing instrument to help unleash their future growth potential into a potentially high-risk financial asset subject to the vagaries of international financial markets and proliferating short-term creditor interests.
We provide timely analysis of the most important developments and emerging issues in international debt and adapt our technical assistance to the changing needs of developing countries.
External Debt Sustainability and Development
Every year, UNCTAD prepares the United Nations Secretary-General´s report to the General Assembly on external debt, which reviews the most recent developments and analyses key issues related to the external debt of developing countries.
Some additional topics raised in the General Assembly report include the role of credit rating agencies, the need to develop an international sovereign debt workout mechanism, the risks posed by the shift towards greater accumulation of domestic debt, the need for improved data reporting, progress in debt relief initiatives, delivery of ODA.
Current Challenges to Developing Country Debt Sustainability
Since the global financial crisis, economies around the world have become dependent on debt for their growth. This has encouraged unprecedented global indebtedness, particularly in emerging markets and developing countries which have little control over global trends.
In this report, it is argued that, within the global financial system, developing countries have a limited number of choices, and proposals for regional and inter-regional monetary and financial cooperation and reliance on directed development banking are set out as a place to start.
Developing Country Debt Sustainability and the SDGs
Target 17.4: Long-term debt sustainability
Assist developing countries in attaining long-term debt sustainability through coordinated policies aimed at fostering debt financing, debt relief and debt restructuring, as appropriate, and address the external debt of highly indebted poor countries to reduce debt distress.