Five instruments Bangkok should put on the table

This week the world’s finance ministers meet in Bangkok for the Annual Meetings of the International Monetary Fund and the World Bank Group. Between 2022 and 2024, developing countries paid $741 billion more in principal and interest on their external debt than they received in new financing, the widest gap in at least fifty years. In 2024 alone they paid $921 billion in net interest on public debt.

The meetings will ask how much more can be lent. The better question is which instruments make borrowing pay for what citizens need. Five are already in use, each with a sovereign that has done it.

Five instruments, each already used

1. The debt-for-development swap. In 2024 Barbados replaced costlier bonds with a BBD 592.7 million sustainability-linked loan at 3.5 per cent, guaranteed by the Inter-American Development Bank and the European Investment Bank. The savings, about BBD 220 million over ten years, fund water investment, and missed targets carry penalties.
2. The catastrophe bond. In May 2026 the World Bank priced a US$200 million catastrophe bond for Jamaica. The cover is parametric: when a hurricane meets a measured trigger, it pays, instead of the nation borrowing again after the storm.
3. The pooled regional bond. In October 2026 the CARICOM Development Fund launched the Caribbean Sustainability Bond, seeking up to US$250 million. Small states issue together, at a size institutional investors will buy.
4. Payment for results. In May 2026 the World Bank approved US$54.7 million for water security in Barbados as a Program-for-Results: the money is released as verified results are delivered.
5. The sustainability-linked sovereign bond. Uruguay sold US$1.5 billion of bonds whose spread falls by up to 30 basis points if the country meets its climate targets under the Paris Agreement. Investors accepted a return that answers to an outcome.

All five share one design choice: the terms answer to something the nation delivers, not only to the date it repays. None needs a new institution. Kenya, paying 9.5 per cent on its newest dollar bond, is the clearest candidate for the first of them.