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CGD Policy Blogs

 

An image of the seas off the coast of Belize.

Belize’s Big Blue Debt Deal: At Last, A Scalable Model?

Last Friday, the Government of Belize alongside the U.S. Development Finance Corporation (DFC) and the Nature Conservancy (TNC) announced the financial close of the largest blue bond for Ocean Conservation to date. The program enables Belize to convert its existing Eurobond (i.e. foreign currency bonds issued on the international market) into blue debt that it will use to implement its national marine conservation agenda.

A graph of countries where debt service exceeds new disbursements on official debt

Visualizing the Debt Service Drag on Developing Country Governments

The G7 countries pledged a massive scale-up in support of developing-country financing at their recent summit in the UK. How it will be financed remains an open question. But analyzing trends in recent debt flows by lenders to developing countries, and taking stock of the Debt Service Suspension Initiative (DSSI), can provide some important lessons for the G7’s new ambitions.

An image of a graph showing Median annual Gini coefficient in LIDCs around a fiscal tightening, by tightening type

Low-Income Developing Countries Will Surely Need More Debt Relief Down the Line

The COVID-19 pandemic has left a large dent in the government budgets of low-income countries (LIDCs). During 2020, they had no choice but to increase public spending to fight the pandemic at a time when shrinking economic activity depressed their revenues. In this blog post, we argue that while these efforts to expand the flow of concessional resources to LIDCs are laudable, they are unlikely to be sufficient and, going forward, some form of debt relief will be necessary to secure fiscal sustainability down the road for these countries.