In a context of fragile economic recovery and possible future debt crises, UNCTAD has published The Roadmap and Guide for Sovereign Debt Workouts which gives recommendations to improve the coherence, fairness and efficiency of current sovereign debt restructuring processes. Aiming principally to guide countries through steps they can take before and during debt restructuring, this document hinges around five principles for sovereign debt workouts: legitimacy, impartiality, transparency, good faith and sustainability. An analysis of this Roadmap by Eurodad can be accessed here.
The IMF and the World Bank announced $1.1 billion in debt relief for Chad, the fourth-least developed country in the world. Chad is now the 36th country to reach completion point under the HIPC Initiative (and the first since 2012). Prior to receiving debt relief, Chad owed around $800m to the World Bank, $400m to the African Development Bank and also about $500m to other governments. Reflecting the significant improvement in economic management in recent years, this announcement will be a welcome development for a country with more than half of its population living in poverty. It has taken almost 20 years since HIPC was established, and 8 years since Chad’s decision point. This now leaves Somalia, Eritrea and Sudan as the last HIPC countries awaiting relief.
DFI chaired and spoke in a panel with Oxfam and Peruvian NGO Ciudadanos al Dia on why monitoring budget revenue, financing and spending will be essential to track progress towards the SDGs. Click here to download the DFI/CaD presentation. This analysis built on the joint DFI-IBP-Oxfam briefing paper prepared in October 2014, as well as Chapter 5 of the GSW 2015 report on how to conduct budget monitoring.
The African Development Bank has asked DFI to provide evidence to its ADF Task Force on potential debt risks for ADF borrowers during 2015-30. The Task Force meeting will be held in Abidjan on 29-30 May, after the Bank’s Annual Meetings.
Chaired and convened for the first time by Senegal, the network of Francophone LIC Finance Ministers and Experts met in Washington, DC on the margins of the Spring Meetings of the IBW. Technical officials from IDA-borrowing OIF countries discussed a report on tax policy, recommending a crackdown on tax exemptions, more progressive tax structures, and changes in global tax rules. Ministers then met senior officials of the IMF, OECD and World Bank, and requested precise actions to enhance IMF policy advice and technical assistance, broaden global initiatives to reform tax rules in order to change treaties, abolish the World Bank Doing Business criterion which encourages lower tax rates, and ensure that all IFC-sponsored projects pay full tax in beneficiary countries.
DFI has won an AfDB competitive bid to support DRC to reform its debt management laws and design a national debt strategy. The project is expected to be completed during 2015-16.
In the CSO seminars’ programme during the BWI Spring Meetings, DFI proposed a motion that “The World Needs a Sovereign Debt Bankruptcy Procedure”, in an Oxford-style debate organised by New Rules for Global Finance, and won the motion by 80-20% and by convincing 20% of the audience to change their positions to favour the motion. A video of the debate is available on the New Rules website.
DFI/OIF supported OIF IDA borrowing Ministers of Finance to contribute to a discussion with the G20 Development Working Group on Financing for Development. Ministers focussed on debt problems for SIDS, the need to reduce the cost of remittances, and especially on the need for G20 Finance Ministers to take political decisions to reform global tax laws and stop insisting on tax exemptions for their companies and their ODA, in order to allow developing countries to get their fair share of global tax revenues.
The new 2015 Government Spending Watch report (“Financing the Sustainable Development Goals: Lessons from Government Spending on the MDGs”) is launched April 13th. The report uses new and unique data-sets from 67 countries on MDG spending over 2012-14 period, new data-sets on debt and defence spending, combined with in-depth analysis of the latest financing trends in developing countries, to draw lessons and implications for the FfD agenda of the SDGs.
It finds that government spending is falling one third short of MDG needs. While the SDGs will require at least US$1.5 trillion extra in public financing annually – meaning a total of US$22.5 trillion in additional finance will need to be mobilised over the lifetime of the SDGs.
The report recommends that this US$1.5 trillion can be financing through a three-pronged approach:Read more...
An evening reception launched the ODI report on Financing the Future, advocating mobilisation of public finance for the SDGs, especially for low- and lower-middle income countries and social protection. Oxfam Executive Director Winnie Byanyima and Ulrika Modéer Swedish Secretary of State for International Development Cooperation made remarks supporting the report’s conclusions.