While financial institutions promote debt swaps as ‘win-win’ solutions that address both debt distress and development financing, borrowing countries report a systematic failure in achieving both objectives, revealing an inversion of development finance principles.
Experiences across various developing countries highlight this critical contradiction. While Belize’s Prime Minister hailed their swap as providing vital ‘breathing space’, Ecuador faced intense pushback, with over 260 activists and academics cautioning against ‘green vulture funds’ exploiting vulnerable economies. This divergence exposes how debt swaps attempt to solve two fundamentally different problems – debt sustainability and development financing…