Aid, debt relief and new sources of finance for meeting the millennium development goals

This article focuses on aid, debt relief and new sources of finance for meeting the Millennium Development Goals (MDGs). It was said that MDGs provide a clear set of objectives for mobilizing the international development community, especially in the area of development finance. The call for increased aid as well as for more debt relief in the creation of new sources of development finance has increased since the United Nations Financing for Development Summit and the subsequent report of the panel chaired by then President Ernesto Zedillo of Mexico on development finance. The goal of reducing the proportion of people living in extreme poverty by 2015 cannot be achieved in Sub-Saharan Africa (SSA). Such optimistic forecast suggests that MDG income poverty target will not be achieved in SSA until 2147.

Developing countries : status of the Heavily Indebted Poor Countries Debt Relief Initiative : report to the Chairman, Subcommittee on International Economic Policy, Export and Trade Promotion, Committee on Foreign Relations, U.S. Senate /

"B-280827"--P. [1].

Debt relief plays key role in helping Sub-Saharan Africa.

"February 1990."

European Union and the developing nations' external debt : EU-15's debt policy, 1960–2008

This Master's Thesis defines the debt policy of the current European Union Member States towards the developing nations. Since no official policy for debt exists in the EU, it is defined to include debt practices (loans and debt relief in development cooperation) and debt within the EU development policy framework. This study (1) describes how the issue of external debt appears in the development policy framework, (2) compares EU Member States' given loans and debt relief to grants for the developing nations (1960s to the 2000s), and (3) measures the current orientation in ODA of each EU Member State between grant aid and loan aid using the Grant-Loan Index (GLI). Theoretical aspects include reasons for selecting between loans (Bouchet 1987) and grants (Odedokun 2004, O'Brien and Williams 2007), policy context of the EU (Van Reisen 2007) and the meaning of external debt in the set-up between the North and the South. In terms of history, the events and impact of the colonial period (where loans have originated) are overviewed and compared in light of today's policies. Development assistance statistics are derived from the OECD DAC statistics portal and EU development policy framework documents from the EU portal. Methodologically, the structure of this study is from policy analysis (Barrien 1999, Hill 2008, Berndtson 2008), but it has been modified to fit the needs of studying a non-official policy. EU Member States are divided into three groups by Carbone (2007a), the Big-3, Northern and Southern donors, based on common development assistance characteristics. The Grant-Loan Index is used to compare Carbone's model, which measures quality of aid, to the GLI measuring the structure of aid. Results indicate that EU- 15 countries (active in debt practices) differ in terms of timing, stability and equality of debt practices in the long-term (1960s to the 2000s). In terms of current practices, (2000-2008), it is noted that there lies a disparity between the actual practices and the way in which external debt is represented in the development policy framework, although debt practices form a relevant portion of total ODA practices for many EU-15 Member States, the issue itself plays a minor role in development policy documents. Carbone’s group division applies well to the Grant – Loan Index’s results, indicating that countries with similar development policy behaviour have similarities in debt policy behaviour, with one exception: Greece. On the basis of this study, it is concluded that EU development policy framework content in terms of external debt and debt practices are not congruent. The understanding of this disparity between the policy outline and differences in long-term practices is relevant in both, reaching the UN’s Millennium Development Goals, and in the actual process of developing development aid.

The Greek debt trap: an escape plan. Bruegel Policy Contribution 2012/19, 7 November 2012

Without corrective measures, Greek public debt will exceed 190 percent of GDP, instead of peaking at the anyway too-high target ratio of 167 percent of GDP of the March 2012 financial assistance programme. The rise is largely due to a negative feedback loop between high public debt and the collapse in GDP, and endangers Greek membership of the euro area. But a Greek exit would have devastating impacts both inside and outside Greece. A small reduction in the interest rate on bilateral loans, the exchange of European Central Bank holdings, buy-back of privately-held debt, and frontloading of some privatisation receipts are unlikely to be sufficient. A credible resolution should involve the reduction of the official lending rate to zero until 2020, an extension of the maturity of all official lending, and indexing the notional amount of all official loans to Greek GDP. Thereby, the debt ratio would fall below 100 percent of GDP by 2020, and if the economy deteriorates further, there will not be a need for new arrangements. But if growth is better than expected, official creditors will also benefit. In exchange for such help, the fiscal sovereignty of Greece should be curtailed further. An extended privatisation plan and future budget surpluses may be used to pay back the debt relief. The Greek fiscal tragedy highlights the need for a formal debt restructuring mechanism

Debt and default in a growth model

This paper presents a small open economy model with capital accumulation and without commitment to repay debt. The optimal debt contract specifies debt relief following bad shocks and debt increase following good shocks and brings first order benefits if the country's borrowing constraint is binding. Countries with less capital (with higher marginal productivity of capital) have a higher debt-GDP ratio, are more likely to default on uncontingent bonds, require higher debt relief after bad shocks and pay a higher spread over treasury. Debt relief prescribed by the optimal contract following the interest rate hikes of 1980-81 is more than half of the debt forgiveness obtained by the main Latin American countries through the Brady agreements.

International debt crisis [microform] : hearing before the Subcommittee on International Economic Policy and Trade of the Committee on Foreign Affairs, House of Representatives, One Hundred First Congress, first session, May 30, 1989.

CIS Microfiche Accession Numbers: CIS 89 H381-116

Debt settlements : FmHA can do more to collect on loans and avoid losses : report to Congressional committees /

"B-257647"--P. 1.

Proposal on debt for climate adaptation swaps: a strategy for growth and economic transformation of Caribbean economies

ECLAC advocates that the Caribbean’s high debt dilemma was not principally driven by policy missteps, or the international financial crisis. Rather, it finds its roots in external shocks, compounded by the inherent structural weaknesses and vulnerabilities confronting Caribbean SIDS and their limited capacity to respond. A major factor has been the underperformance of the export sector, partly due to a decline in competitiveness and a slowdown in economic activity especially among the tourism-dependent economies. Caribbean countries have also accumulated debt as a consequence of increased expenditures to address the impact of extreme events and climate change attendant difficulties. Most Caribbean countries are located in the hurricane belt and are also prone to earthquakes and other hazards. Indeed, a disaster resulting in damage and losses in excess of 5 per cent of GDP can be expected to hit any Caribbean country every few years. Moreover, over the period 2000-2014, it is estimated that the economic cost of natural disasters in Caribbean countries was in excess of US$30.7 billion. The English Speaking Caribbean countries are extremely vulnerable to natural disasters.

Essays on Banking Crises

This thesis aims at finding the role of deposit insurance scheme and central bank (CB) in keeping the banking system safe. The thesis also studies the factors associated with long-lasting banking crises. The first essay analyzes the effect of using explicit deposit insurance scheme (EDIS), instead of using implicit deposit insurance scheme (IDIS), on banking crises. The panel data for the period of 1980-2003 includes all countries for which the data on EDIS or IDIS exist. 70% of the countries in the sample are less developed countries (LDCs). About 55% of the countries adopting EDIS also come from LDCs. The major finding is that the using of EDIS increases the crisis probability at a strong significance level. This probability is greater if the EDIS is inefficiently designed allowing higher scope of moral hazard problem. Specifically, the probability is greater if the EDIS provides higher coverage to deposits and if it is less powerful from the legal point of view. This study also finds that the less developed a country is to handle EDIS, the higher the chance of banking crisis. Once the underdevelopment of an economy handling the EDIS is controlled, the EDIS separately is no longer a significant factor of banking crises. The second essay aims at determining whether a country s powerful CB can lessen the instability of the banking sector by minimizing the likelihood of a banking crisis. The data used include indicators of the CB s autonomy for a set of countries over the period of 1980-89. The study finds that in aggregate a more powerful CB lessens the probability of banking crisis. When the CB s authority is disentangled with respect to its responsibilities, the study finds that the longer tenure of CB s chief executive officer and the greater power of CB in assigning interest rate on government loans are necessary for reducing the probability of banking crisis. The study also finds that the probability of crisis reduces more if an autonomous CB can perform its duties in a country with stronger law and order tradition. The costs of long-lasting banking crises are high because both the depositors and the investors lose confidence in the banking system. For a rapid recovery of a crisis, the government very often undertakes one or more crisis resolution policy (CRP) measures. The third essay examines the CRP and other explanatory variables correlated with the durations of banking crises. The major finding is that the CRP measure allowing the regulation forbearance to keep the insolvent banks operative and the public debt relief program are respectively strongly and weakly significant to increase the durations of crises. Some other explanatory variables, which were found by previous studies to be related with the probability of crises to occur, are also correlated with the durations of crises.

‘Once a miner, always a miner’: Poverty and livelihood diversification in Akwatia, Ghana

This paper offers an alternative viewpoint on why people choose to engage in artisanal mining – the low tech mineral extraction and processing of mainly precious metals and stones – for extended periods in sub-Saharan Africa. Drawing upon experiences from Akwatia, Ghana’s epicentre of diamond production since the mid-1920s, the analysis challenges the commonly-held view that the region’s people are drawn to artisanal mining solely because of a desire ‘to get rich quick’. A combination of events, including the recent closure of Ghana Consolidated Diamonds Ltd’s industrial-scale operation and decreased foreign investment in the country’s diamond industry over concerns of it potentially harbouring ‘conflict’ stones from neighbouring Coˆte D’Ivoire, has had a debilitating economic impact on Akwatia. In an attempt to alleviate their hardships, many of the town’s so-called ‘lifetime’ diamond miners have managed to secure employment in neighbouring artisanal gold mining camps. But their decision has been condemned by many of the country’s policymakers and traditional leaders, who see it solely as a move to secure ‘fast money’. It is argued here, however, that these people pursue work in surrounding artisanal gold mining communities mainly because of poverty, and that their decision has more to do with a desire to immerse in activities with which they are familiar, that offer stable employment and consistent salaries, and provide immediate debt relief. Misdiagnosis of cases such as Akwatia underscores how unfamiliar policymakers and donors are with the dynamics of ASM in sub-Saharan Africa.

Global economic developments, 1999

Includes bibliography

German macro: how it's different and why that matters. EPC Discussion Paper, May 2016

Do the macroeconomics of the German political establishment really differ from standard western macroeconomics? That question was the starting point for the seminar on ‘German macro: How it’s Different and Why that Matters’, which was held at Heriot-Watt University in December 2015, with financial support from the Scottish Institute for Research in Economics (SIRE) and the Money, Macro & Finance Research Group (MMF). This ebook, edited by George Bratsiotis and David Cobham, is the result of that exercise; six of the papers were presented at the seminar in earlier versions, and the editors sought some additional papers to complete the range of perspectives offered. The authors all sought out to discover whether or not there is something unique about German macroeconomics, and in what ways it differs from standard western macroeconomics; is it true that the former neglects demand management (although it may be quite interventionist in other ways), rejects debt relief and emphasises structural reform designed to improve competitiveness as the (only) key to economic growth? How much of whatever difference exists is due to a well worked out set of ideas in the form of Ordoliberalism? In what way does it relate to Germany’s own experiences in different periods? And how far is this the result of political preferences and how much do the idiosyncrasies of these German views matter, for the development of the Eurozone and indeed the health of the German economy?