WASHINGTON — Concerns about a looming debt crisis that had been growing in the past couple years have been accelerated by the COVID-19 pandemic.
As countries scramble to find the funds to address the health response and the economic fallout from the coronavirus crisis, they are often constrained by how much they have to pay to service their debt obligations. In some countries, debt payments amount to more than their spending on health or education.
While both the International Monetary Fund and the G-20 recently announced some debt relief through the end of the year, development advocates say it will not be enough to address either the immediate needs in response to the crisis or the broader systemic problems.
In this video explainer, Devex looks at why debt is important to financing development, where things stand, and how the current system to address debt issues works.