This paper gives an overview of debt in Small Island Developing States (SIDS). It provides an analysis of their liquidity and solvency problems in the aftermath of the COVID-19 crisis, and introduces a quantitative estimation of so-called “off-the-radar” Chinese overseas loans. It finds that debt challenges are not homogeneous across SIDS and that, while exacerbated by the economic consequences of the pandemic, they are deeply rooted, and not a one-off liquidity problem linked to the crisis. Lastly, it reviews measures currently implemented by the Development Assistance Committee (DAC) members and multilateral organisations to help SIDS overcome the looming debt crisis, as well as measures that could contribute to enhance resilience and sustainability of SIDS development financing.
