Making Debt work for Development
Debt burdens that either were already unsustainable prior to the COVID-19 crisis or that are now threatening to become unsustainable under the impact of this shock, constitute a major and immediate roadblock to a successful response to this crisis toward an economic recovery aligned with the achievement of the SDGs in a large number of LICs and MICs.
The UNCTAD SDFA framework identifies the development finance needs of selected beneficiary countries to achieve the most significant SDGs and how to make this compatible with external financial sustainability and public debt sustainability. Taking as point of departure UNCTAD Gap-analysis tool, which estimated the impact of achieving SDGs 1-4 on public debt sustainability of selected developing countries, this framework goes beyond standard Debt Sustainability Analysis (DSA) as it focuses on the development finance requirements for sustainable development and considers all sources of external financing.
Enhanced capability in beneficiary developing countries to diagnose external financial and public debt vulnerabilities will enable the design of debt strategies consistent with overcoming debt overhangs and attaining the SDGs (as quickly as possible). In-depth country analysis will be conducted for Pakistan and Sri Lanka.