Development Finance International

DFI and Norwegian Church Aid launched a new report on how to solve the new debt crisis, at the IMF and World Bank Annual Meetings. The report shows that the crisis is widespread, affecting 114 countries, and concentrated in those countries accessing capital markets (not in former HIPCs). Debt service is far higher than spending on education, health, social protection and climate. Debt to domestic and multilateral creditors are key components in many countries, and will need to be restructured. The report analyses in detail the lessons of past debt relief initiatives, and makes 10 sets of recommendations to ensure that debt relief is: provided to all types of countries, based on their SDG financing needs, negotiated rapidly, including all necessary creditors, and providing protection against lawsuits. In addition, it recommends measures to avoid future crises by maximising accountability to domestic stakeholders; protecting against future predatory and corrupt debts; building country negotiating capacity; and providing lower-cost development financing.