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Breaking the Cycle of Risk | Report

by Madaline Dunn

Breaking the cycle of risk: Addressing resilience and debt for a new global financial architecture, a new report from E3G and Mistra Geopolitics explores the geopolitics of debt and finance in relation to the need to build resilience globally.

“As we consider how to reform the international financial architecture, we have the opportunity to map the journey out of the debt and resilience crisis for climate vulnerable countries,” the report reads. 

The report’s key findings include: 

  • Resilience, or the ability to bounce back, is essential to the success of economies and societies. However, while noting building a country’s own resilience is important, it outlines that each country also depends on the resilience of others, whether neighbours or, in some cases, countries far away but which are essential suppliers of food or other goods.
  • Debt levels across the world have been rising, with particular pressure on low-income countries (LICs). Moreover, it outlines that the current debt crisis is different from previous ones in that the mix of creditors is much more varied geographically and in terms of creditor types. In addition, the availability of financial aid remains inadequate.
  • Climate resilience and debt restructuring are now geopolitical issues.
  • Clear roadmaps and transition plans will help frame the roles and actions of debtor countries, their donors and creditors in emerging from the present crises. 

The report also notes that the debt products, the institutions, and the whole social contract between these parties “must move to a more mutually engaged and supportive one” if the world is to move to a “more resilient future.”

For the full report, head here. 

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