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Growing Out of Debt: Perspectives from Developing Countries Around the World

July 4, 2023

Countries’ public debt difficulties are partly due to the series of adverse shocks hitting the global economy – from COVID-19, to the Ukraine war, and to the fight against inflation. Often, these have exacerbated pre-existing domestic structural weaknesses. The impacts go well beyond fiscal sustainability and the need for fiscal consolidation, affecting patterns of economic growth, social inclusion, and well-being.

This webinar, organized by ERF with FDL, RedSur, and IDRC, will present findings from recent research in low-income countries, highlight tensions and trade-offs generated by the debt difficulties across the countries studied, and explore policy recommendations from a Southern perspective.

Panelists will be addressing the financial, economic, social and developmental effects of ongoing debt difficulties, and their possible implications and priorities for domestic policy. From across the developing world, six case studies from the Middle East and North Africa region (Egypt, Lebanon, Tunisia, Morocco, Sudan, and Jordan), three from Latin America and the Caribbean (Bolivia, Honduras, and Paraguay), and three from Sub-Saharan Africa (Ethiopia, Nigeria, and Uganda) will be shared.

The case studies exhibit a variety of challenges in low- and lower-middle-income countries regarding public debt dynamics, fiscal policy, and development outcomes. They indicate that there are some differences across regions to compute and some within-region heterogeneities to consider. These case studies also reveal common challenges across the developing world that need to be tackled globally.

There is potential space for peer learning on finding ways to achieve debt, social, and environmental sustainability and on how to involve international financial institutions (IFIs) and multilateral development banks (MDBs) in the process.