A strong legal framework that forms the basis for the activities of debt managers is crucial for enabling an effective public debt management function.
... See More + This paper aims to complement discussions on the legal foundations of debt management by detecting and discussing essential elements that allow the government to issue sukuk, the equivalent of bonds, in Islamic finance. Drawing on the cases of recent sovereign issuers, these discussions begin with outlining the clear provision of a mandate to issue and to employ certain public assets in the execution of underlying transactions, as well to establish, engage with, and administer Special Purpose Vehicles used in structuring these issuances. Additional aspects that need to be addressed are the treatment of proceeds and the assurance of investors with regards to debt service. The enabling environment should be complemented by changes in the taxation regime and financial market regulations that facilitate the issuances.
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The development objective of the Debt Management Strengthening Programme Project is to strengthening institutional capacity of Development (DPCO) to undertake its enhanced role of managing market and credit risks.
... See More + The World Bank Group (WBG) Pakistan Country Partnership Strategy 2015-19 is structured around four strategic themes, or result areas: energy, private sector development, inclusion, and service delivery. These reports provide key information on the compliance with the strategic targets approved in the MTDS 2015/16-2018/19. The emphasis of this indicator is on improving the quality of these reports that were produced bi-annually in 2015/16. As per Fiscal Responsibility and Debt Limitation Act (FRDLA), DPCO is mandated with the preparation of fiscal and debt policy statements to be submitted to the National Assembly by January of each year. It has been fulfilling this responsibility since inception. In addition, since 2013, DPCO started to undertake some basic analysis to compare alternative borrowing strategies. In April 2014, DPCO prepared the first-ever Medium Term Debt Management Strategy (MTDS) for Pakistan (2014-18) that was approved by the Finance Minister. A revision was completed in May 2016 when the Medium Term Debt Management Strategy for Pakistan (2016-19) was published. The latter document shows a substantive improvement regarding the clarity of the targets the debt manager should pursue. The updated MTDS stipulates following key strategic guidelines during 2015/16 – 2018/19: (i) gradually lengthen the maturity profile of domestic debt; (ii) pursuing a smooth redemption profile, especially in the domestic debt; (iii) availing maximum available concessional external financing; and indicated (iv) preference of foreign currency funding in US Dollar over other currencies keeping in view the balance of payment requirements and existing external debt obligations.
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On March 31, 2017, International Development Association (IDA) Board of Governors adopted resolution number two hundred and thirty-nine. It was resolved that general increase in subscriptions of the Association shall be authorized on the following terms and conditions: authorization of subscriptions and contributions; agreement to pay; payment; mode of payment; currency of denomination and payment; effective date; advance contributions; commitment authority; heavily indebted poor countries (HIPC) contributions; authorization of grants, guarantees, equity investments, and risk intermediation; administration of IDA17 funds under the eighteenth replenishment; and allocation of voting rights under eighteenth replenishment.
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Over the past decade, a large number of low- and lower-middle income ‘frontier economies’ have begun to access international private capital markets to meet fiscal financing needs.
... See More + In this paper we seek to identify drivers of this trend, identify associated risks, and present policy implications for frontier-market policy-makers. Through simple analysis of the characteristics of recent frontier market issuers, we show that smaller, poorer, and less well-governed economies are now accessing global credit markets. Through cross-country regression analysis, however, we demonstrate that the capacity of these countries to issue debt (and the cost of this debt) continues to be influenced by their macroeconomic performance and quality of governance. Drawing on evidence from Ghana and Zambia, we illustrate potential risks arising from recent expansions of access to global debt markets, where rapid debt accumulation of foreign-denominated debt in the context of lessened market discipline and following recent debt relief is now posing pronounced debt sustainability and refinancing risks. We conclude that increased access to international debt markets presents both opportunities and risks to frontier issuers. The new cohort of frontier issuing economies should: i) take careful account of debt risks and debt sustainability considerations when developing fiscal policy and debt strategies; ii) work to reduce the costs of ongoing external borrowing through adopting sound economic policies and protecting credit ratings; and iii) develop domestic debt markets as a potential alternative source of fiscal financing through which to reduce reliance on foreign-denominated Eurobond debt with its associated refinancing and currency risks.
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Ratings for the First Growth and Competitiveness Development Policy Grant for Lesotho were as follows: outcomes were moderately unsatisfactory, risk to development outcome was high, Bank performance was moderately unsatisfactory, and Grantee performance was moderately unsatisfactory.
... See More + Some lessons learned included: Future DPOs should chose indicators that support the objective of fiscal consolidation more directly and should address components of fiscal spending and revenues; programmatic lending limited to no more than 2 year programs could give more flexibility to adjust the program to changing circumstances; In the context of Lesotho, which has low capacity of implementation, all operations should include capacity building or should be linked to other ones that provide it
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Implementation Completion and Results Report ICR3665 DEC 19, 2016
Russia is a country of global importance and great internal diversity, making it challenging to undertake a coherent country growth diagnostic.
... See More + The world’s largest transcontinental country spans eleven time zones in northern Eurasia. Russia is the main trading partner for many of its more than a dozen neighbors. Russia’s importance to the global climate change agenda is reflected in the fact that it has the world’s largest forest reserves, second only to the Amazon Rainforest in terms of the amount of carbon dioxide it absorbs. Altogether, these characteristics render undertaking this Systematic Country Diagnostic about Russia’s future development course challenging. The analysis identifies general causal chains related to Russia’s interlinked development challenges and opportunities, but is often based on data only available at the national level. From the 1998–99 crisis until 2011, Russia experienced nearly uninterrupted strong growth and unprecedented gains in shared prosperity. However, growth dynamics have weakened since 2012, and the end of the commodity super cycle in 2014 ushered in a period of difficult economic adjustment. From 2012–13, growth and shared prosperity trends started to weaken as second-generation structural reforms―strengthening the climate investment, diversifying the economic structure, and closing the infrastructure gap―advanced more slowly. With fiscal pressures rising, the cost of the underlying social contract—in which the state is entrusted with providing jobs, services, and a system of significant transfers and subsidies—is becoming more difficult to sustain. The recent crisis exposed the vulnerability of Russia’s economy and raised questions about the sustainability of past achievements in boosting shared prosperity. Productivity and job growth will remain elusive and ultimately jeopardize the social gains of the past decade without a conducive investment environment, skilled labor, and adequate infrastructure. This diagnostic identifies two pathways where progress is critical for sustainable growth and an expansion of shared prosperity. The first pathway identified areas where new policies are necessary to achieve a recovery in productivity, focusing on infrastructure and connectivity, the regulatory regime for businesses, constraints on innovation by firms, and skills development for individuals. The second pathway identified the main areas for policy reforms to further reduce vulnerability by deepening human capital gains and improving access to public services. The analysis identifies channels through which the labor market can again become a source of raising the incomes of the bottom 40 percent by improving health and education services and strengthening the poverty impact and sustainability of Russia’s social protection system. To achieve these goals, progress is essential in three requisites: fiscal sustainability, governance, and management of natural resources.
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International Debt Statistics (IDS) 2017 focuses on financial flows, trends in external debt, and other major financial indicators for low, middle and high-income countries.
... See More + This report includes more than 200 time series indicators from 1970 to 2015 for most reporting countries. This year’s edition of International Debt Statistics, successor to Global Development Finance and World Debt Tables, and the fourth in the series, is designed to respond to user demand for timely, comprehensive data on trends in external debt in low- and middle-income countries. It also provides summary information on the external debt of high-income countries and public (domestic and external) debt for a select group of countries. By providing comprehensive and timely data that reflects the latest additions and revisions, and by expanding the scope of the data available online, the authors aim to serve the needs of the users and to reach a wider audience. This report is an indispensable resource for governments, economists, investors, financial consultants, academics, bankers and the entire community. The printed edition of International Debt Statistics 2017 now provides a summary overview and a select set of indicators, while an expanded dataset is available online (datatopics.worldbank.org / debt/ids).
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This Chongqing‐Dadukou District Development Policy Financing (DPF) supports Chongqing‐Dadukou District Government in achieving fiscal sustainability through a forward‐looking, comprehensive and transparent public finance framework that integrates budget, public investment and debt management.
... See More + The DPF program in Dadukou is divided into three pillars: fiscal sustainability, integrated capital investment plan, and transparency. Under this operation, Dadukou can serve as a pilot for local government fiscal reform in China by creating a forward‐looking, comprehensive and transparent public finance regime that integrates budget, public investment and debt management. While this is the first subnational development policy operation in China, the project design is informed by the experience of such subnational operations in other countries, as well as from other types of operations in China.
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This First Hunan Fiscal Sustainability Development Policy Financing supports the Hunan Provincial Government to achieve fiscal sustainability by developing a forward‐looking, comprehensive and transparent public finance framework that integrates budget,public investment and debt management.
... See More + The four pillars of the DPF are: (a) putting provincial finances on a fiscally sustainable path; (b) improving the efficiency and comprehensiveness of public investment planning; (c) better monitoring and regulating debt management of local governments in the Province; and (d) promoting transparency. China is now a high middle‐income country, and well positioned to become a high income country in the next decade. China’s exceptionally rapid growth and development in recent decades has served the country well, but can also be associated with economic, environmental and social imbalances. While growth in China still remains high by international standards, macroeconomic risks have increased, including in the form of rapidly rising debt. The Chinese Government has recognized the seriousness of this problem, and has introduced a major reform in 2014 to bring subnational debt under control and reorient subnational officials and budgetary institutions toward fiscal / debt sustainability. Hunan Province and Chongqing Municipality were chosen as regions to pilot World Bank development policy financing operations focused on budget reforms to achieve fiscal sustainability at the subnational level. Hunan is a province of 67.4 million people (equivalent to the size of France), covering an area of 211.8 thousand square kilometers. This World Bank Development Policy Financing for USD 200 million will assist the Hunan Province Government realize reforms to place its public finances on a sustainable path. This Development Policy Financing will support budget reform in Hunan Province in two primary ways: (i) it will assist the Provincial Government directly in restructuring its budgets and capital investment plans toward fiscal sustainability and increased efficiency; (ii) it will support innovative approaches already underway in Hunan Province to use the new provincial allocation authority over new borrowing and debt swaps to incentivize local governments toward reforms and the disclosure of key information.
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Some of the headings included in this issue of the Development Economics Prospects Group (DECPG) weekly global economic newsletters are as follows: taking stock; weekly insight: do fiscal multipliers depend on fiscal positions?
... See More + Major data releases; activity and inflation; financial markets; and commodity prices.
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Some of the headings included in this issue of the Development Economics Prospects Group (DECPG) weekly global economic newsletters are as follows: taking stock; weekly insight: do fiscal multipliers depend on fiscal positions?
... See More + Major data releases; activity and inflation; financial markets; and commodity prices.
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Some of the headings included in this issue of the Development Economics Prospects Group (DECPG) weekly global economic newsletters are as follows: taking stock; weekly insight: why are some policy interest rates negative?
... See More + Major data releases; activity and inflation; financial markets; and commodity prices.
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The development objective of the Second Fiscal Effectiveness and Growth Development Policy Project for Romania is supports government reforms to: (a) strengthen fiscal management and the performance of state‐owned enterprises (SOEs) (b) improve the functioning of energy, property, and capital markets.
... See More + This Fiscal Effectiveness and Growth Development Policy Loan (FEG‐DPL_ series was designed in close collaboration with the government, the European Commission (EC), and the International Monetary Fund (IMF) to complement the 2013–2015 precautionary programs of the European Union (EU) and the IMF. It supports key structural reforms to strengthen fiscal management and performance of state‐owned enterprises (SOEs), and to improve the functioning of the energy, property, and capital markets. It builds upon previous World Bank (WB) policy lending operations in Romania and is aligned with Romania’s Country Partnership Strategy (CPS) for 2014–2017. Romania has achieved the highest growth in the EU over the last fifteen years, but further progress with structural reforms is needed to sustain it. Poverty in Romania remains the highest in the EU and progress in poverty reduction has been limited. This DPL contributes significantly to poverty reduction in Romania.At the same time, this DPL supports key structural reforms that help boost Romania’s growth potential and accelerate convergence with the EU. This operation supports a new corporate governance framework for public enterprises; one IPO12; and the restructuring of a large SOE. This DPL improves public sector outcomes through the following prior actions: (i) extending the use of centralized procurement in health will lead to importantprice reductions for medicines and generate savings which can be channeled to underfunded programs inthe health sector; (ii) the prioritization of public investments will lead to a better allocation of the scarcepublic money towards priority projects and accelerate the implementation of infrastructure projects; (iii)the law on the MSIP will consolidate social assistance programs, reduce administrative costs and channelmore resources to the poor; and (iv) the new law on corporate governance of SOEs is an important milestone in strengthening the performance of Romania’s large SOE sector.
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