Building Back Better from COVID-19: Dismantling the debt trap and unlocking critical finance for children

The last decade’s rapid build-up of sovereign debt has put many countries at a financially vulnerable starting point to respond to COVID-19, and debt servicing continues to take up a sizeable portion of developing country governments’ revenue. The current debt crisis faced by many countries represents a real barrier to the realization of children’s rights. Many countries face unsustainable and rising debt levels, and debt payments that far outweigh investments in areas such as health, nutrition and education. Ultimately, the price of unresolved unsustainable debt is paid by children – through the lack of health care workers or quality and accessible health and nutrition services, loss of education, or lack of social protection. Suspending, and potentially cancelling debt payments for countries in need is one of the fastest ways to free up funds for social spending on affected populations.

This brief lays out the reasons why immediate and longer-term actions must be taken to avoid forcing developing countries to make an impossible choice between repaying debts or providing for their citizen’s needs and rights. A solution to unsustainable debt levels is critically needed to realize children’s rights and achieve the 2030 Agenda, and to enable countries to respond to and recover from the COVID-19 pandemic.