Debt For What Swaps? Guiding principles for the allocation of debt swap resources

Adil Ababou

No 2503, FDL Policy Notes from CEPREMAP

Abstract: This paper highlights how debt swaps can be a crucial mechanism in achieving the Sustainable Development Goals and improving debt sustainability. To date, nine debt swaps have been implemented across seven countries, primarily in the Americas, releasing nearly $1.7 billion. When structured effectively around specific objectives, debt swaps can deliver substantial impacts. This paper emphasizes that as debt swaps expand into diverse sectors and stakeholders, they should be viewed as vital tools for public finance. Importantly, these flows offer predictability and reliability due to: long-term financial commitments that transcend typical economic and political cycles, a robust institutional and legal framework to withstand various shocks, and collaboration among multiple stakeholders. The unique structure and legal aspects of these flows warrant detailed examination to maximize their potential for advancing development outcomes.

Keywords: Debt Swaps; Development Finance; Sovereign Debt; Financial Instruments; Climate Finance (search for similar items in EconPapers)
Pages: 22 pages
Date: 2025-03
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Persistent link: https://EconPapers.repec.org/RePEc:cpm:notfdl:2503

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