International Debt Is Strangling Developing Nations Vulnerable to Climate Change, a New Report Shows
Many small island nations which contributed little to climate change now must borrow money to rebuild after climate-induced storms. The debt service they’re carrying hinders their ability to invest in new adaptive infrastructure before the next storms hit.
By Katie Surma
Small island developing countries are increasingly becoming locked into a cycle of environmental disasters and compounding debt burdens, making them less capable of investing in climate resilient infrastructure and providing basic public services, according to a new report scheduled for partial release on Wednesday.
Coinciding with this week’s World Bank and International Monetary Fund meetings, the report adds to growing evidence that those institutions, created in the wake of World War II, must adapt their lending and grant programs to the era of climate change, said Emily Wilkinson, a co-author and senior researcher with the London-based global affairs think tank ODI, formerly the Overseas Development Institute.
A large proportion of the world’s 39 small island developing states, known as SIDS, owe more than half of their total debt to development banks, including the World Bank.
Wilkinson and her ODI colleagues analyzed 23 of the most climate-vulnerable SIDS and found that their governments spent over $46 billion on debt servicing payments from 2013 to 2022, which is roughly three times the amount of international climate finance funding over the same period.
