Developing countries need a new approach to long-term financing 

[LONDON/BEIJING] The world is in the midst of a financing crisis. As world leaders work to mobilise trillions of dollars to meet climate and development goals, expensive public debt is limiting governments’ ability to make long-term investments. A long-term framework for low-interest financing of global public goods is urgently needed.

While debt burdens have increased dramatically almost everywhere, the danger is particularly acute in developing countries, where government debt repayments are growing twice as fast as in developed economies. Faced with unbearable debt repayment burdens, many developing countries cannot make the necessary investments to reduce poverty and adapt to a rapidly warming planet.

For most developing countries, the size of the debt is not the primary issue. In fact, it is too small to support development at the pace required. Moreover, developing countries’ debt is a small proportion of overall global debt, while their debt-to-gross-domestic-product ratios are often barely half those of richer countries.