How Far Have We Moved Forward on Debt Sustainability? A Stocktaking One Year On
April 17, 2019 | FES New York Office
The 2019 Financing for Sustainable Development Report notes a trend we cannot ignore: debt will continue to rise, bringing with it, the risk of greater debt distress in a greater number of countries and an even greater challenge to finance the SDGs. As the Report emphasizes, the continued tightening of monetary policy and rising global risk aversion increases the burden of debt service, which in turn poses a risk to debt sustainability. In this context, innovative mechanisms, especially state-contingent debt instruments that allow a country’s debt service obligations to be linked to ability to pay, are a critical part of the necessary response. After the devastating hurricane season of 2017, there has been particular interest in developing climate resilient mechanisms for Small Island Developing States, in particular Caribbean countries susceptible to natural disasters.
This discussion, with UN Member States, participants from the UN Secretariat, and members of civil society attending the FfD Forum, kicked off with a briefing on the present debt challenges in the Caribbean, the response of the Jubilee debt network, which now has a Coordinator for the Caribbean, and how these plans engage with the goals set forward in the Financing for Sustainable Development Report.