Massive borrowing capital is the idea to accumulate in 10-15 years as much capital as it would take for Low-and-Middle-Income Countries (LMIC) and Low-Income Countries (LIC) 100-150 years to accumulate, using a 30-40 years long investment program that includes economic, infrastructure and environmental investment. LICs and LMICs need a boost in human capital, infrastructure, business and environment. Economic development is a mutually supportive accumulation of capital in each of these areas. If these countries receive significantly more external financing, such capital can become transformative. Besides, traditional earmarked bilateral and multilateral development grants, there are four other important sources of capital for LICs and LMICs.
This report aimed to provide an analysis of each of these potential sources of capital. Particular attention is paid to Debt Sustainability Framework (DSF) (Chapter 1), as a key mechanism for borrowing from bilateral and multilateral institutions and the role of credit rating agencies (CRAs) in borrowing from the private sector (Chapter 2). Chapters 3 and 4 provide an overview of the role of multilateral and national development banks, and specialized funds respectively and how they operate and their scale at the moment along with actionable policy recommendations to scale-up capital flows through these institutions. The report does not propose a specific financing mechanism, but rather provides important background information, assessment and data for further research on the different actors and institutions that could be involved in massive borrowing programs.