Commonwealth Secretariat Discussion Paper

The Discussion Paper series raises awareness of topics that are of importance to Commonwealth work programmes. Discussion Papers explore an issue relating to research or programme activities and provoke debate on it. The intended readership is researchers and policy advisers.


Is Today's Pandemic Tomorrow's Debt Crisis?

COVID-19 and the Risk of Restricting Debt Relief for Small and Vulnerable Countries

This paper investigates whether the decision by the G20 and the IMF to restrict debt relief only to the income poor risks debt crises, in light of the COVID-19 pandemic. It considers debt sustainability projections, risks to small states (including natural disasters and market concentration), and the tumultuous outlook for the global tourism industry. Concluding that the risk of debt crises post-2020 is significant, it recommends a number of measures the global community could take to arrest the problem before it is out of control.


Keywords: small states, IMF, G20, COVID-19, debt
JEL: H63: Public Economics / National Budget, Deficit, and Debt / National Debt; Debt Management; Sovereign Debt; F34: International Economics / International Finance / International Lending and Debt Problems
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