The main objective of this project is to propose policy alternatives for post-pandemic public debt restructuring, and new tools for a sustained recovery that is inclusive, including addressing the growing gender disparities and the growing environmental priorities. The project builds on the preparatory work carried out through the IDRC project #109673, which highlighted the need for local evidence to ensure that issues related to inclusion and sustainability are integrated into policies for recovery, as well as the past decade of work combining natural resources management and macroeconomic research from Red Sur.
The project combines contributions of academic research with the perspectives and challenges of policymakers to propose fiscal innovations and advocate for their implementation in the emerging world, with a particular focus on two regions: Sub-Saharan Africa and Latin America and the Caribbean.
The research involves 6 selected countries (Bolivia, Honduras, Paraguay, Ethiopia, Nigeria and Uganda). Country teams followed the research strategies defined by the consortium with common and particular objectives. The common goal was to generate recommendations for new debt management strategies, and a new set of fiscal and financial instruments for the selected group of small low-income countries, in Latin America and Africa.
This research becomes more important as international development debates continue to focus their attention on this ‘polycrisis’ and its impact on debt, food and climate, and the broader implications for reforming development finance models. When the project started these debates were not as clear as they are today in the principal international fora and institutions debates on the needed policy mixes to advance the Sustainable Development Goals (SDGs) together with debt sustainability.
The research was coordinated by Red Sur team in collaboration with local members and partners:
In Latin America and the Caribbean (LAC) country studies were led by the following research centers:
- Bolivia: Fundación ARU
- Paraguay: Centro de Análisis y Difusión de la Economía Paraguaya (CADEP)
- Honduras: Sergio Sánchez and Gerson Urtecho, independent researchers
In Africa the country studies were led by the following centers:
- Uganda: Economic Policy Research Centre (EPRC)
- Ethiopia: Addis Ababa University (AAU)
- Nigeria: Centre for the Study of the Economies of Africa (CSEA)
After finding common grounds and region/country-specific features during the joint research internal workshops, the project team focused on the challenges and priorities ahead for specific contexts. Themes/focus are summarized in the table below:
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Themes/focus
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LAC
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Ethiopia
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Nigeria
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Uganda
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Debt analysis and instruments
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Analysis fiscal sustainability and design alternatives for restructuring public debt
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How to avoid future debt distress in a sustainable manner. Role of new actors
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Debt for development swaps
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Distributional impacts of debt policies and COVID-19 shocks on households and firms
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Analysis funding SDG & climate priorities
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Transformations in fiscal policy
to contribute to sustainable development (and long-term priorities)
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Options for cost-effective policies that support sustainable inclusive economic recovery
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Gender responsiveness policies
Carbon pricing policies
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Transparency, accountability
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Stakeholders’ consultation, building on Red Sur network
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Management, transparency and accountability of debt; citizen engagement on debt relief
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Extensive consultations with stakeholders
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Evidence and tools that promote accountability and transparency of and participation in policy making
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Communication, engagement
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Regional and international presentations via webinars. Partners from governments, academia, civil society, private sector and the media.
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Ongoing communication with ministries planning, finance
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Engagement with stakeholders at all levels for policy influence
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Engagement with new creditors, including private sector actors - banks, bond holders and credit rating agencies
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Research methods (main)
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Economic modeling and descriptive policy analysi
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Period: December 2021 til May 2023.
