Debt Relief for a Green and Inclusive Recovery

Not only has the global economic slowdown hampered the ability of many devel- oping nations to mobilise resources, many are using 30% to 70% of what little government revenue is coming in to service debt payments. This report calls for a global debt relief effort to grant emerging markets and developing countries in need the space necessary to fight the virus and put together a green and inclusive recovery.

Debt relief has to be part of a broader agenda for enabling green and inclusive recoveries in countries around the world. A debt relief effort such as the one we propose should be coupled with a new and ambitious allocation of SDRs and significant new capital mobilised from development finance institutions. This will provide the fiscal space for emerging markets and developing countries to adopt sustained counter-cyclical responses to the crisis.

Countries share common but differentiated responsibilities in combating the climate crisis. Without large-scale debt relief and efforts aimed at facilitating a green and inclusive recovery, the international community can abandon its hopes of achieving the 2030 Agenda for Sustainable Development and the Paris Agreement. The lives and livelihoods of current and future generations hang in the balance.

This report puts forward the proposal for a «Debt Relief for Green and Inclusive Recovery Initiative» as an ambitious, concerted, and comprehensive debt relief initiative – to be adopted on a global scale – that frees up resources to support recoveries in a sustainable way, boosts economies’ resilience, and fosters a just transition to a low-carbon economy.