Guest view: A debt relief plan for green recovery

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Power-generating windmill turbines are pictured in Suzlon wind farm at Sanodar village, west of the Indian city of Ahmedabad, September 8, 2009. REUTERS/Amit Dave

KARACHI/LONDON, June 28 (Reuters) – The soothing calm and palpable enthusiasm in debt markets is deceiving. Developing and emerging economies, which suffered a large-scale withdrawal of international capital at the outbreak of the Covid-19 crisis, have seen investors return. But a rise in commodity prices and more favourable bond market conditions may provide only temporary relief. These countries will be hamstrung in their attempts to mobilise the resources necessary for a green and inclusive recovery that puts them back on a track to meet their climate and development goals.

None of the problems of debt overhangs in poorer nations have been resolved. Risks continue to loom large, and for some countries a new round of debt issuances may further undermine debt sustainability. The International…

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