Ideas to Action:

Independent research for global prosperity

Borrowing and Debt

Borrowing is a critical source of financing for human and physical investment. Yet for developing countries borrowing presents unique financial challenges the investment it supports often has diffuse and long-term benefits. Going into the COVID-19 crisis, a growing number of developing countries were facing difficulties in managing their debt, which have been aggravated in the wake of the pandemic.

In this body of work, CGD experts address the following questions: How should borrowing be used to overcome the immediate crisis and relaunch a sustainable and resilient recovery? Can debt relief provide a short-term palliative? For how long? When should longer-term debt restructuring be considered? How can the global community deal help developing countries deal with private sector debt? What is the role of “new” official creditors that were not part of previous debt relief initiatives?

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