The new debt crisis and what to do about it

Global debt levels have been surging constantly over the past decade, and the need to fight the COVID-19 crisis with running fiscal deficits and borrowing money has been a further shock to global economies. While central bank interventions have been keeping interest rates low in the global north, countries in the global south are particularly vulnerable to crisis because they owe large amounts of external debts. The risk of debt crisis is high and debt service costs are rising rapidly. Each dollar spent on debt service in low-income countries is a dollar that is not being spent on financing sustainable development, securing human rights and recovering from the COVID-19 crisis.