Sovereign Debt
Strengthening debt management and sustainability is essential to creating and preserving the fiscal space needed to achieve development, climate, and biodiversity goals.
Developing countries urgently need funding to meet the Sustainable Development Goals, address climate change, and protect biodiversity, with total annual requirements approaching USD 6 trillion by 2030. As governments deal with rising debt burdens and limited fiscal space, strengthening debt management systems and sustainable borrowing is crucial.
When managed well, sovereign debt can be a powerful tool for financing development and climate action. But when institutional capacity is limited or global macroeconomic conditions shift, debt can quickly become a constraint, diverting resources away from health, education, and environmental priorities.
Amid mounting global pressures—from economic shocks to climate hazards—countries must strengthen their fiscal policy regime aimed at debt sustainability to ensure borrowing supports, rather than hinders, sustainable development. This means building robust fiscal frameworks and ensuring that debt is transparent, effective, and used in service of national development goals. It also entails continuing to push for a more equitable and efficient international financial architecture that supports countries in maintaining and restoring debt sustainability.
Our work on sovereign debt
IISD’s work on sovereign debt helps governments improve debt governance and fiscal resilience. This work is part of IISD’s broader efforts seeking to address fiscal challenges, including our work on taxation, recognizing how tax policy and debt management work together to drive long-term fiscal stability and development. Our work on debt focuses on three core areas:
- debt management, where we strengthen the institutions, legislation, and decision-making processes behind public borrowing.
- debt sustainability, where we help countries assess their own debt sustainability and develop credible fiscal strategies and frameworks; and
- debt for green and inclusive transformation, where we support governments in mobilizing resources for climate and biodiversity goals while keeping debt sustainable.
Through global guidance, technical assistance, and strategic convening, IISD partners with countries to embed debt management into the broader effort to finance a fair, climate-resilient future.
Latest
What Makes Today’s Debt Crisis So Pernicious?
Anahí Wiedenbrüg and Yanne Horas discuss the causes of current debt vulnerabilities and present their latest report, the Debt for Resilience initiative, which charts a path toward sustained economic recovery and resilience for debt-distressed countries.
Why Does Debt Matter for Sustainable Development and Climate Action?
Anahí Wiedenbrüg discusses how effective debt management can help developing countries achieve climate action and SDG goals while minimizing financial risks.
FfD4 Countdown: The Fourth Financing for Development Conference Must Address Urgent Debt Relief for Low-income Countries
The Fourth Financing for Development Conference (FfD4) in July 2025 is crucial to tackle sovereign debt issues. With 35 low-income countries in debt distress, urgent relief and global debt reforms are needed. Clear, actionable commitments must be made for effective debt relief and restructuring.
Key takeaways from the Global Sovereign Debt Roundtable
Anahí Wiedenbrüg, Yanne Horas, and Fernando Morra analyze the proposals from the Global Sovereign Debt Roundtable aimed at addressing debt challenges faced by developing countries.
Latest
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