A growing number of countries face unsustainable public debt loads — which are eating into their spending on development priorities — and existing systems have struggled to provide solutions. At the World Bank-International Monetary Fund annual meetings in Washington, D.C., this week, debt will be on the table, but the question is whether there will be any headway.
The statistics paint a bleak picture: Low-income countries’ average annual spending on repaying their debts jumped to $60 billion from $20 billion between 2010 and 2020. And last year, emerging markets and low- and middle-income countries paid tens of billions of dollars more in debt repayments than they received in new lending and official development assistance, according to research released by the ONE Campaign earlier this year.
The lowest-income and most climate-vulnerable countries now pay twice as much in debt repayments as they receive in climate finance, according to a recent analysis by the think-tank International Institute for Environment and Development.