Sustainable Development Finance Assessment will adapt, extend and enhance UNCTAD gap analysis tool to estimate the impact of meeting the 2030 Agenda on developing countries’ long-term debt sustainability in the context of the COVID-19 crisis. The country-specific debt sustainability assessments will move away from sequential prioritization of meeting short-run external debt obligations - which have become even more stressful in the midst of the economic fallout of COVID-19 - to a longer-term debt framework that enable developing countries to both meet their debt obligations in the long-run and to attain the SDGs, starting with Pakistan and Sri Lanka.
Since the launch of the 2030 Agenda for Sustainable Development (2030 Agenda) in 2015, many developing countries have seen their external financial positions deteriorate, first gradually and recently at a greater speed due to compounding global shocks, including the uneven recovery from the Covid-19 pandemic, the rapidly worsening climate crisis, the armed conflict in Ukraine and the ongoing cost-of-living crisis.
This report looks at the UNCTAD Sustainable Development Finance Assessment (SDFA) framework, and the research (theoretical and empirical) undertaken by UNCTAD consultants from a policy perspective. To do this, the report explores the contributions of Thirlwall and Pasinetti, whose work forms the main theoretical foundation of the UNCTAD SDFA framework.
This user manual i) introduces the theoretical foundation of the UNCTAD Sustainable Development Finance Assessment Framework Policy Dashboard, ii) demonstrates how the dashboard was built, and iii) provides a step-by-step guideline to adapt the SDFA policy dashboard to other countries. The SDFA dashboard determines trends in the sustainability of their external, public sector and integrated financial positions.
This paper is an output from the project “Response and Recovery: Mobilising financial resources for development in the time of COVID-19”, which is co-ordinated by the Debt and Development Finance Branch of UNCTAD and jointly implemented with ECA, ECLAC and ESCAP.
The debt of developing countries continued to rise in 2019—albeit at a slower pace—and, with it, the risks to debt sustainability. Forty-four per cent of low-income and least developed countries (LDCs) are currently assessed as being at high risk of external debt distress or already in debt distress. COVID-19 and related global economic and commodity price shocks could significantly increase this number.