Things were looking shaky for Indonesia this time last year. Their exchange rate fell 20 percent from February to April. Their $410 billion of foreign debt swelled as their currency plunged. The collapse in tourism and fall in commodity prices meant the foreign exchange they normally used to finance those debts was evaporating. The sudden stop in capital flows meant refinancing the $44 billion of debt that was due in the coming months might not be possible.
Indonesia needed international help. Where they sought that help was typical of many developing countries, but it also reveals why linking debt forgiveness to investments in Sustainable Development Goals (SDGs) projects might not be as effective as some think. Luckily, there is a be…
Read the full article at: https://www.brookings.edu/blog/future-development/2021/03/10/the-problem-with-linking-debt-forgiveness-to-the-sustainable-development-goals/
