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Debt Transparency in Developing Economies (English)

Analyzing public debt in low-income developing countries (LIDCs) is like solving a puzzle with many missing pieces. Forty percent of LIDCs have not published any sovereign debt data in the last two years. Public debt data disclosed in different publications show discrepancies of up to 30 percent of GDP across sources, and relative to the records of relevant authorities. Over 15 LIDCs have outstanding collateralized debt but no details of the collateralization are provided in official statistics. Restructuring of bilateral and commercial debt is often handled privately. All these problems have different origins and implications. Yet, they all amount to a lack of transparency. The international community has become acutely aware of the importance of debt transparency after recent cases of "hidden debt" The "Tuna Bond" case in Mozambique highlighted the dangers of inadequate debt transparency. In 2016 two large previously unreported loans totaling 1.15 billion US Dollars —equal to about 9 percent of the country’s GDP—were revealed. As a result, donor support was frozen, the economy plunged, and the government was forced to make deep cuts in public spending. The biggest losers were poor Mozambiquans. Nontransparent public debt can quickly alter the lives of millions of ordinary citizens. This report is the first comprehensive assessment of debt transparency in LIDCs. It presents a complete picture of the current challenges and the pending policy agenda for all stakeholders. It draws upon new databases and surveys to take stock of key gaps in debt reporting, borrowing practices and legal frameworks, offering a detailed and timely view on the current state of debt transparency in LIDCs. It also synthesizes recent studies and policy discussions on debt transparency and offers practical policy recommendations required to further improve debt transparency in LIDCs.

Details

  • Author

    Rivetti,Diego

  • Document Date

    2021/10/01

  • Document Type

    Report

  • Report Number

    165760

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2021/11/10

  • Disclosure Status

    Disclosed

  • Doc Name

    Debt Transparency in Developing Economies

  • Keywords

    public debt; heavily indebted poor country; Integrated Financial Management System; availability of debt data; Public and Publicly Guaranteed; central bank balance sheet; international central security depository; high public debt; state-owned enterprise; Public Debt Management; negative pledge clause; lack of transparency; risk of debt; credit rating agencies; source of funding; debt restructuring; senior debt; financial sector specialist; Special Purpose Vehicle; international financial institution; credit rating agency; domestic debt market; future revenue stream; debt reporting; operational framework; public sector debt; public debt dynamics; public sector borrower; conflicts of interest; cost of debt; private sector entities; politically sensitive issues; incentives for governments; segregation of duty; delegation of power; commodity price shock; secondary market transaction; domestic debt security; accrual accounting framework; liquid bond market; data collection process; standard and guideline; international bond market; access to finance; financial reporting standard; credit-rating agency; institutional legal framework; global surveillance system; deviation from standard; debt management activity; privileges and immunity; debt management practice; private sector creditor; financing development; global economic slowdown; central bank accounts; lack of commitment; public private partnership; public debt data; income developing country; level of compliance; public external debt; private sector lender; long-term debt sustainability; external public debt; disclosure of debt; central government debt; Special Drawing Right; Check and Balances; monetary policy instrument; public sector entity; structure of debt; debt instrument; international standard; Debt Statistics; debt datum; Borrowing Countries; backed loan; commercial debt; Learning and Innovation Credit; contingent liability; export credit; debt recording; contingent liabilities; legal requirement; transparency challenges; external borrowing; audit requirements; debt portfolio; national gdp; debt operation; private creditor; transparency agenda; borrowing operation; international community; fiscal space; borrowing process; lending decision; sovereign borrowing; prudent use; debt finance; Management Systems; debt relief; payment schedule; syndicated loan; full disclosure; estimation strategy; sustainable financing; debt authorization; financing practice; loan contract; legal mandate; official statistic; global debt; public borrowing; external stakeholder; budget process; inclusive development; vulnerable countries; total debt; government balance; debt situation; advanced economy; real interest; domestic law; primary deficit; bilateral creditor; specific debt; data request; borrowing authority; median country; public domain; borrowing plan; Government Accounts; recent evidence; expenditure arrears; minimum requirement; voluntary basis; accounting reporting; lending institution; disclosure policy; creditor data; government loan; Fragile Countries; recent years; international loan; clear rules; collected information; commercial loan; monitoring process; data transparency; accounting standards; regular assessment; debt information; calculation methods; fiscal risk; statistical reports; domestic arrears; individual debt; international consensus; staff capacity; complete disclosure; reputational risk; restructuring process; capacity limitation; organizational procedures; international reporting; personal gain; Natural Resources; security investment; public scrutiny; borrowing limit; data reporting; fiscal rule; legal term; borrowing cost; strategic objective; public loan; shifting expenditure; fiscal deficit; international initiative; bond yield; bond spread; external loan; material benefit; global financial; potential debt; external data; financial commitment; participating country; burden sharing; debt service; temporary suspension; financial flow; private lending

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Citation

Rivetti,Diego

Debt Transparency in Developing Economies (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/743881635526394087/Debt-Transparency-in-Developing-Economies