This paper gives an overview of debt in small island developing states (SIDS). It provides an analysis of liquidity and solvency problems faced by SIDS and introduces a quantitative estimation of hidden (or off-the-radar) Chinese overseas loans.
The paper finds that debt challenges, exacerbated by the economic consequences of the COVID-19 pandemic, are not homogeneous across SIDS. It also finds that the current debt problem in SIDS is deeply rooted and not just a one-off liquidity problem linked to the COVID-19 crisis.
Lastly, it reviews current alleviating measures to help SIDS overcome the looming debt crisis, and explores additional measures to enhance resilience and sustainability of their development financing.
