The COVID-19 shock is posing unprecedented challenges to advanced country governments, and these challenges are enormously more daunting in developing economies. Developing countries cannot easily flatten the contagion curve by closing down their largely informal economies without facing the prospect of more people dying from starvation than from the COVID-19 illness. Moreover, even the most advanced high-income developing countries with relatively deep financial and banking systems do not have anywhere near the fiscal space that advanced economies can, in principle, unlock.
Following a brief discussion of current debt vulnerabilities in developing countries, this update of UNCTAD’s Trade and Development Report 2019 lays out a series of steps that the international community will need to take for achieving Agenda 2030 and moving to a more resilient and sustainable future for all countries. It discusses the current debt situation, and proposes a 'Global Debt Deal' for developing countries. The report concludes by proposing three steps for advancing the Global Debt Deal and ensuring a sustainable and resilient future.