Conferences — G-24 Technical Group on Debt Management

Sri Lanka hosts a debt management conference of G-24 ;

Finance Minister Mangala Samaraweera yesterday sounded an alarm over the debt repayments of developing countries, including Sri Lanka, warning that changes in global financial markets demanded stronger macroeconomic policies and institutions for debt management to meet looming repayment deadlines.

The Finance Minister, addressing the G-24 Technical Group Meeting in Colombo, drew attention to the forecasts of stronger growth in developed nations which is expectedto push up global interest rates. This would mean that emerging markets with mid-to-high levels of debt would find it more expensive to raise funds to repay debt in international financial markets.

The IMF Spring Meetings will be held in Washington next month where the G-24 Technical Group is tasked with presenting measures that could be taken to promote sustainable debt repayment by developing countries.

Sri Lanka has particular interest in the matter as from 2019 it has to repay about $3.5 billion each year until 2022. The Minister recalled that the IMF’s latest World Economic Outlook report issued last month stated: “The tightening of global financial conditions would have implications for global asset prices and capital flows, leaving economies with high gross debt refinancing needs and un-hedged dollar liabilities particularly exposed to financial distress.”

Attended by experts from multilaterals including Marcelo Giugale, Director of Financial Advisory & Banking at the World Bank.

We recommend his book “Economic Development: What Everyone Needs to Know

“Paying down government debt is like a transfer of the commodity wealth to the young — when they start working, they won’t have to be taxed so heavily. You should worry if you see your country quickly depleting its oil or gold deposits and borrowing fast at the same time — not an unusual sight, unfortunately.”

Related:

Learn more about by doing the IMF’s MOOC -Debt Sustainability Analysis- course at edX;

Part 1: Principles of Debt Sustainability

Provides you with a summary of main concepts and derivations of all the technical content necessary for the analysis of public and external debt sustainability.

Part 2: Public Debt Sustainability Framework for Market-Access Countries

Guides you through the recently revised IMF debt sustainability framework for advanced and emerging economies and illustrates the MAC DSA template for public debt.

Part 3: Debt Sustainability Framework for Low-Income Countries

Guides you through the recently revised IMF-WB debt sustainability framework for low-income countries and illustrates the LIC DSA template for external debt.

Part 4: Medium-Term Debt Management Strategy Framework

Discusses the 8 steps under the MTDS framework and guides you through the MTDS analytical template.

Part 5: Debt Sustainability Analysis under Uncertainty

Presents a probabilistic approach to debt sustainability and illustrates risks to debt dynamics using stochastic simulation methods.

Related Readings;

Part 1: Principles of Debt Sustainability

S. M. Ali Abbas; Bernardin Akitoby; Jochen R. Andritzky; Helge Berger; Takuji Komatsuzaki; Justin Tyson. (2013), Dealing with High Debt in an Era of Low Growth, (Washington, D.C.: International Monetary Fund)

International Monetary Fund. 2011. Modernizing the Framework for Fiscal Policy and Public Debt Sustainability Analysis.

International Monetary Fund. IMF Debt Sustainability Analysis Background

Eduardo Ley. Fiscal (and External) Sustainability

Part 2: Debt Sustainability Framework: MACs

IMF Webpage: Debt Sustainability Analysis in Market-Access Countries (MACs)

IMF Data Sources Tutorial: Finding Data for the MAC DSA

International Monetary Fund. 2012. Systemic Banking Crises Database: An Update.

International Monetary Fund. (2012). World Economic Outlook: Coping with High Debt and Sluggish Growth (Chapter 3: The Good, the Bad, and the Ugly: 100 Years of Dealing with Public Debt Overhangs).

International Monetary Fund. (2013). Staff Guidance Note for Public Debt Sustainability Analysis in Market-Access Countries.

Part 3: Debt Sustainability Analysis for LICs

IMF Webpage: Debt Sustainability Framework for Low-Income Countries

International Monetary Fund. (2012). Revisiting the Debt Sustainability Framework for Low-Income Countries.

International Monetary Fund. (2013). Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries.

IMF Webpage: Concessionality and the Design of Debt Limits in IMF-Supported Programs in Low-Income Countries

Task Force on Finance Statistics. (2013). Public Sector Debt Statistics Guide.

IMF Fact Sheet: Special Drawing Rights (SDRs)

IMF Fact Sheet: Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative

IMF Fact Sheet: The Multilateral Debt Relief Initiative (MDRI)

IMF Webpage: IMF Members’ Financial Data by Country

IMF Webpage: IMF Finances

International Monetary Fund. (2013). Côte d’Ivoire 2013 Article IV Consultation and Fourth Review Under the Extended Credit Facility Arrangement.

International Monetary Fund. (2013). Bangladesh 2013 Debt Sustainability Analysis Update.

International Monetary Fund. (2013). Kenya 2013 Debt Sustainability Analysis.

Buffie, Berg, Pattillo, Portillo and Zanna. (2012). Public Investment, Growth, and Debt Sustainability: Putting Together the Pieces (Washington, D.C.: International Monetary Fund)

G. Melina, S. Yang, and L.F. Zanna. (2014), Debt Sustainability, Public Investment, and Natural Resources in Developing Countries: the DIGNAR Model (Washington, D.C.: International Monetary Fund).

Part 4: Medium-Term Debt Management Strategy Framework (MTDS)

World Bank Webpage: Medium-Term Debt Management Strategies.

International Monetary Fund and World Bank. (2009). Developing a Medium-Term Debt Management Strategy (MTDS): A Guide for Country Authorites.

IMF and World Bank. (2012). MTDS — The Analytical Tool — User Guide.

International Monetary Fund. (2014). Policy Paper: Revised Guidelines for Public Debt Management.

Ministry of Finance of Brazil, National Treasury Secretariat. (2014). Federal Public Debt: Annual Borrowing Plan.

Bank of Canada. (2011). Developing a Medium-Term Debt-Management Strategy for the Government of Canada.

Ministry of Finance of the Republic of Kenya. (2011). Republic of Kenya — Medium-Term Debt Management Strategy.

HM Treasury, United Kingdom. (2014). Debt and Reserves Management Report 2014–15.

Part 5: Debt Sustainability Analysis Under Uncertainty

Heller, Peter S. ; Katz, Menachem ; Debrun, Xavier ; Thomas, Theo ; Koranchelian, Taline ; Adenauer, Isabell. (2006). Making Fiscal Space Happen: Managing Fiscal Policy in a World of Scaled-Up Aid.

Celasun, Oya ; Debrun, Xavier ; Ostry, Jonathan David. (2006 Primary Surplus Behavior and Risks to Fiscal Sustainability in Emerging Market Countries: A “Fan-Chart” Approach.

Publications:

Part 1: Principles of Debt Sustainability

S. M. Ali Abbas; Bernardin Akitoby; Jochen R. Andritzky; Helge Berger; Takuji Komatsuzaki; Justin Tyson. (2013), Dealing with High Debt in an Era of Low Growth, (Washington, D.C.: International Monetary Fund)

International Monetary Fund. (2011). Modernizing the Framework for Fiscal Policy and Public Debt Sustainability Analysis.

Part 2: Debt Sustainability Framework: MACs

International Monetary Fund. (2012). World Economic Outlook: Coping with High Debt and Sluggish Growth (Chapter 3: The Good, the Bad, and the Ugly: 100 Years of Dealing with Public Debt Overhangs).

International Monetary Fund. (2005). Ukraine Staff Report: Ex Post Assessment of Longer-Term Program Engagement, (pp. 4).

International Monetary Fund. (2002) Ireland: Selected Issues, pp. 42.

International Monetary Fund. (2013). Ireland: Eleventh Review Under the Extended Arrangement.

Laevan, Luc & Valencia, Fabian. (2012) Systemic Banking Crises Database: An Update (Washington, D.C.: International Monetary Fund).

Part 3: Debt Sustainability Analysis for LICs

Buffie, Edward, Andrew Berg, Catherine Pattillo, Rafael Portillo, and Luis-Felipe Zanna. (2012) Public Investment, Growth, and Debt Sustainability: Putting Together the Pieces (Washington D.C.: International Monetary Fund).

International Development Association. 2012. Revisiting the Debt Sustainability Framework for Low-Income Countries.

International Monetary Fund. (2013). Bangladesh: Second Review under the Three-Year Arrangement under the Extended Credit Facility, Requests for Modifications of Performance Criteria — Debt Sustainability Analysis Update.

International Monetary Fund. (2013). Côte d’Ivoire: Article IV Consultation and Fourth Review Under the Extended Credit Facility Arrangement.

International Monetary Fund. (2013). Kenya: Fifth Review under the Three-Year Arrangement under the Extended Credit Facility and Request for a Waiver and Modification of Performance Criteria — Debt Sustainability Analysis.

International Monetary Fund. (2013). Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries (Washington D.C.: International Monetary Fund).

G. Melina, S. Yang, and L.F. Zanna. (2014). Debt Sustainability, Public Investment, and Natural Resources in Developing Countries: the DIGNAR Model (Washington, D.C.: International Monetary Fund).

Part 4: Medium-Term Debt Management Strategy Framework (MTDS)

International Monetary Fund and World Bank. (2009). Developing a Medium-Term Debt Management Strategy (MTDS): A Guide for Country Authorites.

IMF and World Bank. (2012). MTDS — The Analytical Tool — User Guide.

International Monetary Fund. (2014). Policy Paper: Revised Guidelines for Public Debt Management.

Ministry of Finance of Brazil, National Treasury Secretariat. (2014). Federal Public Debt: Annual Borrowing Plan.

Bank of Canada. (2011). Developing a Medium-Term Debt-Management Strategy for the Government of Canada.

Ministry of Finance of the Republic of Kenya. (2011). Republic of Kenya — Medium-Term Debt Management Strategy.

HM Treasury, United Kingdom. (2014). Debt and Reserves Management Report 2014–15.

Part 5: Debt Sustainability Analysis Under Uncertainty

Heller, Peter S. ; Katz, Menachem ; Debrun, Xavier ; Thomas, Theo ; Koranchelian, Taline ; Adenauer, Isabell. (2006). Making Fiscal Space Happen: Managing Fiscal Policy in a World of Scaled-Up Aid.

Celasun, Oya ; Debrun, Xavier ; Ostry, Jonathan David. (2006). Primary Surplus Behavior and Risks to Fiscal Sustainability in Emerging Market Countries: A “Fan-Chart” Approach.

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Ismail Ali Manik

Uni. of Adelaide & Columbia Uni NY alum; World Bank, PFM, Global Development, Public Policy, Education, Economics, book-reviews, MindMaps, @iamaniku