债务困境与发展困境：2021年的两次危 机.docx

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1、I. IntroductionJust over a year into the COVID-19 crisis, it is apparent that there is great urgency for governments to address an overlapping set of issuesamong them health, climate, nature, resilience, recoveryjobs, and inequalityat a scale far larger than would have been imaginable before the ons

2、et of the crisis.Political leaders have concluded that bold action today on resolving debt and development distress simultaneously is less risky than caution and incremental change, or an effort to sequence debt resolution before development. This recognition draws a parallel between dealing with th

3、e pandemic and dealing with broader issues of global equity and fairness. Just as success in the fight against COVID-19 is not achievable until there is almost universal vaccination and the virus dies out, it is equally true that all countries need to shift to a path of sustainable development to bu

4、ild resilience into the global economy. Efforts of all countries are needed to avoid surpassing the tipping point thresholds of greenhouse gas concentration and to conserve the planets biodiversity, as extinction cannot be reversed.Government ambition, in turn, must be reflected in the willingness t

5、o undertake policy reforms and to put in place new investments that will transform economies in the desired direction. Those new investments must be financed. For most emerging markets and developing countries, a sizable portion of the finance must come from abroad in the form of debt.Against this b

6、ackground and logic, the international financial system is not performing well in its core function of allocating the worlds savings in a fashion that is globally efficient The business-as-usual scenario presented by the International Monetary Fund (IMF) in its World Economic Outlook predicts that A

7、frica, Latin America, and the Middle East will each have negative net financial flows (excluding grants) in 2021. Debt levels have risen such that governments in half of all low-income countries are either already in debt distress or at high risk. Of the other half, only 11 low-income country govern

8、ments are classified as having a low risk of debt distress. IMF (2020). “List of LIC DSAs for PRGT eligible countries.* Most of the low-income countries in debt distress, such as Mozambique, Somalia, Sudan, and Zimbabwe have had long track records of development distress.Governments need to continue

9、 to borrow and invest. The private sector will not be a substitute. Foreign direct investment is falling. United Nations Conference on Trade andBox 2. Sri Lanka case studySri Lanka is a lower-middle-income country, and as such is currently not eligible for the DSSI. Though the country has a high deb

10、t-to-GDP ratio at 67 percent, it has had strong growth over the past 10 years (though slowing in the past 5), meaning if growth continues, debt levels will stabilize and then start to decline even without policy adjustments to the primary surplus.Sri Lanka has been under a $1.1 billion IMF program s

11、ince 2016 to mobilize government revenue to get their debt on a sustainable trajectory, while still prioritizing social and investment needs.23 Though the country has made some progress on structural reforms and transparency, the Easter Sunday terrorist attacks in April 2019 severely set back progre

12、ss on government revenue targets, due to subsequent declines in tourism, which accounts for 5 percent of GDP. The government primary balance fell from a projected 1.5 percent to 0.2 percent in 2019, with the government cutting spending to offset revenue shortfalls. While tourism was expected to rebo

13、und in 2020 to help the country get back on track, the global shutdown brought on by COVID-19 halted this recovery. In addition to the current economic setbacks caused by the pandemic and terror attacks, the country is vulnerable to natural disasters, meaning any future economic recovery is tenuous.

14、Sri Lanka has $4.5 billion in public debt service due in 2021: $1.5 billion to bilateral creditors, $1.9 b川ion to bondholders, $700 million to multilateral entities, and $400 million to commercial lenders. Though not DSSI eligible, it did receive $820 million in IFI COVID-19 related funding in 2020

15、from the World Bank, IFC, and ADB. See COVID-19 financing trackers for the World Bank, IFC, and ADB. Sri Lanka w川 likely need much more help to get on a sustainable growth path, given its back-to-back economic hits in 2019 and 2020.Limited creditor participation: The DSSI is an agreement between G-2

16、0 governments to suspend payments due on their official bilateral debt. Yet private creditors make up the fastest growing segment of debt, even in low-income countries. As Figure 2 shows, DSSI eligible countries have $14 billion in debt service due to bondholders and private creditors in 2021. Thoug

17、h private creditors have agreed to work with DSSI countries to restructure debt on a case-by-case basis, there is no coordinated architecture for this process, and ratings agencies have said such efforts would likely result in a credit downgrade.IIF (2020). MIIF Letter to G-20 Regarding the Debt Ser

18、vice Suspension Initiative (DSSI).” Sept. 22. This private debt typically has much higher interest rates and shorter23 IMF (2019), “Sri Lanka Sixth review under the Extended Arrangement Under the Extended Fund Facility and request for waiver of ronobservarce and modification of performance criterion

19、. IMF Country Report no. 19/335, November.maturities than official bilateral or multilateral debt. So far, there has been no private creditor participation in the DSSI, and given this, the fiscal breathing room created by official bilateral creditors serves to first pay back private creditors, rathe

20、r than generating resources for priority social spending.Figure 2. Total external debt service 2021, public and publicly guaranteedBillions, current USDPrivate Bondholder Bilateral Multilateral$250$36$200$150$100$50$-$145$6阿_$ J回$1$3$3 _ 一 同$9$22$13$17$18$30DSSI Participating DSSI Non-participating

21、LMIC exluding DSSI UMIC excluding DSSISource: World Bank International Debt Statistics (2021).G-20 Common Framework for Debt TreatmentsIn November 2020, the G-20 agreed to a shared framework to help DSSI eligible countries pursue debt restructuring.26 This process will be pursued on a case-by-case b

22、asis at the request of the debtor. Country needs will be determined by IMF and World Bank debt sustainability analysis. Under the framework, bilateral creditors agreed to fair burden sharinga debtor seeking relief from one creditor must seek similar terms from other creditors, including private cred

23、itors. The framework is noteworthy for getting agreement among all G-20 members, including non-Paris Club creditors like China, India, Turkey, and Saudi Arabia.Chad was the first country to request debt relief under the framework in January 2021. Shalal (2021). uChad becomes first country to ask for

24、 debt overhaul under G-20 common framework.* Reuters, Jan. 27. Yet Paris Club creditors account for less than 4 percent of Chads total debt stock, and26 G-20 (2020), “Statement: Extraordinary G-20 Finance Ministers and Central Bank Governors Meeting. Nov. 13.the country has no outstanding Eurobonds.

25、 40 percent is held by private creditors, the majority by commodity trader Glencore on an oil backed loan to a state mining company, which has already been restructured in 2018. The IMF has proposed a $560 million financing program and World Bank President David Malpass has warned that Chad may need

26、 a deep reduction in net present value of debt to address its debt overhang problem.Ethiopia has also requested debt relief under the G-20 framework. Wheatley and Schipani (2021), “Ethiopia asks for debt relief as Covid takes toll. Financial Times, Feb. 1. Mohammed and Thomas (2021). “Exclusive: Eth

27、iopia to seek debt relief under G-20 debt framework.” Reuters, Jan. 29. Ethiopia has been participating in the DSSI, benefitting from potentially $700 million in bilateral debt service relief in 2021 if the initiative is extended through the end of the year. However, Ethiopia also has $700 million i

28、n debt service due to commercial creditors and private bondholders, and another $300 million to multilaterals. An additional complication is that portions of Ethiopias debt service due to the China Eximbank has already been restructured. A finance ministry statement highlights the dilemma: Implement

29、ation . will address the debt vulnerabilities of the country, while preserving long-term access to international financial markets/529 Immediately after the announcement of Ethiopias debt relief request, the price of Ethiopias 2024 Eurobond fell by 8.4 percent.Zambia became the third country to requ

30、est debt relief through the G-20 framework on February 5, 2021. Reuters (2021). uZambia requests debt restructuring under G-20 common framework/, Feb. 5. The country has $3 billion in outstanding Eurobonds, in addition to $3.5 billion in bilateral debt, $2.1 billion borrowed from multilateral entiti

31、es, and $2.9 billion from commercial lenders; $3 billion of this total is held by China or Chinese banks.ReflectionIf more countries seek debt relief, it is useful to learn from past experience with debt reduction programs such as the Heavily Indebted Poor Countries (HIPC) initiative started in 1996

32、. That program successfully transferred resources to countries seeking debt relief, but by redirecting aid towards debt relief countries, it may have inadvertently reduced concessional funds going to other countries. At the same time, HIPC took a long time from inception to the so-called completion

33、point for a country. The intent was to take time to implement structural reforms to mitigate the risk of future debt crises, but in practice, HIPC did little to fundamentally alter debt dynamics and most HIPC countries steadily built up debt again. HIPC countries also showed little systematic tenden

34、cy to grow faster, either as compared to their prior history or compared to non- HIPC countries, with global trends being far more important for GDP and export growth. HIPC countries showed a mixed impact in terms of acceleration of progress towards the MDGs, although spending on education does appe

35、ar to have been significantlyincreased. Overall, evaluations suggest that paying more attention to public expenditure management would have improved the impact of HIPC. World Bank IEG (2006). “Debt Relief for the Poorest: An Evaluation Update of the HIPC Initiative.”Private creditor participation: I

36、n the G-20 framework, debtor countries are only “required to seek from.private creditors a treatment at least as favorable as the one agreed in the MOU (a legally non-binding memorandum of understanding between debtor and creditors).There is no binding commitment for private creditor participation.

37、The case of Ethiopia already illustrates different incentives facing bilateral creditors and debtor country governments. The former are eager to ensure equal treatment including private creditors; the latter are eager to preserve their credit rating in private capital markets by minimizing the need

38、for recontracting private debt service. Although there is an argument that any form of recontracting would have a significant impact on future access to capital markets, research suggests the opposite. There is little if any long-term impact on future capital market access of recontracting in the fa

39、ce of clearly unpredictable shocks. Bolton et al. (2020). “Legal Air Cover. c6pR Discussion Paper No?DP15336.Private creditor participation: In the G-20 framework, debtor countries are only “required to seek from.private creditors a treatment at least as favorable as the one agreed in the MOU (a leg

40、ally non-binding memorandum of understanding between debtor and creditors).There is no binding commitment for private creditor participation. The case of Ethiopia already illustrates different incentives facing bilateral creditors and debtor country governments. The former are eager to ensure equal

41、treatment including private creditors; the latter are eager to preserve their credit rating in private capital markets by minimizing the need for recontracting private debt service. Although there is an argument that any form of recontracting would have a significant impact on future access to capit

42、al markets, research suggests the opposite. There is little if any long-term impact on future capital market access of recontracting in the face of clearly unpredictable shocks. Bolton et al. (2020). “Legal Air Cover. c6pR Discussion Paper No?DP15336.The limited participation of private creditors in

43、 voluntary debt reduction initiatives is not surprising. It is one of the lessons from implementation of the Heavily Indebted Poor Countries. Private creditor participation below anticipated levels generated a shortfall in HIPC relief that was substantial for some countries. World Bank IEG (2006fop7

44、citChina question: It is unclear whether obligations due to Chinas state-owned development banks should be treated as bilateral official credits or as private credits. Although the framework seeks parity in treatment between these two classes, the difference is that bilateral governments have agreed

45、 to fully participate, while private creditor participation remains voluntary and could in theory have different parameters. The experience to date suggests that a case-by-case approach is being applied.Limited eligibility: The G-20 framework only applies to DSSI eligible countries, that is IDA-elig

46、ible countries and Angola. There are at least 34 countries (with $44 billion in debt service in 2021) with substantial risk of default, of which only 25 ($12 billion in debt service) are eligible to participate in the DSSI and G-20 framework. Kharas and Dooley (2020), op. cit.Accountability: When mo

47、ney moves fast, there is a risk of corruption and favoritism that reduces impact of public spending and, in the worst cases, reduces public trust and confidence in government. The Open Government Partnership champions open decision making, open budgets, open aid, open contracting, and oversight by f

48、ormal institutions like auditors and informal grass-roots organizations.35ProposalsWhile the DSSI and the G-20 framework represent important steps in providing a mechanism to coordinate debt relief in the wake of COVID-19, further reform of these two programs would allow for greater coverage and imp

49、act.1. The IMF and the World Bank have supported calls to extend the DSSI period until the end of 2021. The G-20 has agreed to review if this is required at the time of the 2021 Spring Meetings. Oxfam and the Jubilee Debt Campaign have called for extending the DSSI until the end of 2022.36 UNCTAD suggests annual renewals of the DSSI based on debt sustainability analysis.Trade and Development Report Update, April. Other ideas include tying forbearance to