Debt risks of Low Income Countries: How lower-income country debt risks can be determined by conditions in advanced economies and global financial markets

The report focuses on the external debt sustainability of developing countries.
The current paradigm of discussion on debt centres around debt sustainability and the framework developed by the IFIs. These tend to focus on domestic macroeconomic issues, and trade dynamics, without taking into account global financial factors. Our paper brings to the fore global factors that affect the financial conditions of LICs.

The report will show how some developing countries, on the back of abundant global liquidity since the global financial crisis of 2008-2009, have become connected to global financial markets. The sustainability of debt is contingent on the state of such global liquidity.