Development Finance International
23 July, Addis FSD Conference - FES Debt Sustainability Side Event
The two debt sustainability studies prepared by Gail Hurley and Matthew Martin for Friedrich Ebert Stiftung were discussed in a side-event on Debt Sustainability Assessments and their Role in the International Financial Architecture at the Addis Ababa FSD Prepcon on 23 July. Very useful comments were provided by Robert Powell, IMF Representative to the UN in New York; Volker Hey of the BMZ; Patricia Miranda of LATINDADD; and the South African Ambassador to the UN in New York, Mathu Joyini. The studies were well received, and the ensuing discussion focussed on how to make debt sustainability assessments more SDG-linked and transparent, and use them to help return countries’ debt service to sustainable levels. The two studies are available here.
21 July, Resolving the Worst Ever Debt Crisis – 2024 Report Launch
The updated 2024 version of the Norwegian Church Aid study – Resolving the Worst Ever Global Debt Crisis – was launched at the Addis FFD conference. Its main findings are that average debt service to revenue and expenditure ratios have risen by 5% to 42% and that 91 countries will continue to have very high debt service for the next decade. It, therefore, makes proposals for differentiated debt relief to help countries hit by natural disasters, lower-income and market-accessing countries to reduce their debt service burdens sharply during 2025-30; suggests comprehensive reforms to the Common Framework and other legal and normative measures to be pursued in FSD and UNCAC, as well as laying out a roadmap for ending the debt crisis by the end of 2025. The study is available here, and a Guardian article covering it here. The full 2024 Debt Service Watch database will be published in October.
21 July, FES/UNFSDO Preparatory Day – Advancing Debt Sustainability and SDG Investments
To support the debt workstream of FSD Conference preparation, FES and UNFSDO organised the latest in a series of meetings to gather high-quality policy proposals to maximise debt sustainability and fund SDG investments. Matthew Martin spoke in Session 1: Sustainable and responsible borrowing and lending, and debt crisis prevention. He emphasised that we are way beyond the stage where short-term rescheduling or reprofiling of debt service will work (only Tajikistan and Uzbekistan have a short-term debt service problem this could resolve), and stressed the need to cancel debt service for countries hit by natural disasters; reform DSAs so that they include top-priority SDG spending needs and their positive effects on growth, agree in UNCAC to prevent enforcement of predatory debt or restructuring agreements, and enhance accountability of debt policies to parliaments and citizens in the global North and South. The discussion also focussed on reforming credit ratings, regulating bond issuance, and the need for a Framework Debt Convention to enhance the UN’s role in norm-setting on debt issues.
20 July, Addis Ababa FSD Conference – FES End the Debt Trap Side Event
Matthew Martin attended the FES End the Debt Trap: Options for National Legislative Action Side Event at the Addis Ababa Financing for Development Preparatory Conference on 20 July. Co-chaired by Paola Subacchi and Martin Guzman, It discussed fascinating case studies of Argentina, Ecuador, Ghana, Germany, Jordan, Kenya, Pakistan, South Africa, Sri Lanka, Tunisia, the United States and Zambia, and drew conclusions about the best way to take forward national-level action by parliaments to hold the executive branch of government accountable. Matthew contributed some comparative lessons from the IBP project on Debt Accountability to Domestic Stakeholders, and some information on prospects for Legislation on International Debt Relief in the United Kingdom. The studies will be published later in the year.
4 July, Commitment to Reducing Inequality 2024 Database Completed
The 2024 database for the Commitment to Reducing Inequality Index has been completed, after a six-month process of data compilation and checking, expanding the number of countries covered to 164 from 161 in 2022 – with the addition of Iraq, Montenegro and Somalia. The joint DFI-Oxfam team is now in the process of writing the analytical report based on the index results, which will also contain a special thematic chapter analysing what the IMF, United Nations and World Bank should do now to enhance their work to help countries reduce inequality. The report will be launched at the IMF-World Bank Annual Meetings in October.
