Public debt distress has three distinct underlying causes which should be evaluated and addressed differently. Similarly, traditional bilateral, non-traditional bilateral and commercial creditors have shared but differentiated responsibilities in sovereign debt restructuring. Proper resolution of sovereign debt distress should ideally be guided by these two principles/realities, while continuing with pragmatic second-best approaches.
This brief focuses on the importance of strengthening the coherence and consistency of the international development system with respect to financing sustainable development and climate ambitions. It highlights the fragmented approaches to financing currently prevalent and underscores the need to integrate international commitments regarding sustainable development and climate ambitions with national investment planning and financing processes. A similar integrated approach is called for at the global level as well.
Voting right imbalances persist in international financial institutions with respect to the population and size of the economy of their member states. Aiming for greater influence on financing policy decisions impacting developing countries, Asia-Pacific member states should continue on institutional reform discussions. However, strengthening of regional financial institutions in parallel as a complementary approach.