Addressing Debt Vulnerabilities in Small States : The Potential Role of New Financing Instruments
The papers in this series aim to provide a vehicle for publishing preliminary results on Macroeconomics and Fiscal Management (MFM) topics to encourage discussion and debate. This paper explores two new financing mechanisms that multilateral and bi...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/03/26067070/addressing-debt-vulnerabilities-small-states-potential-role-new-financing-instruments http://hdl.handle.net/10986/24009 |
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okr-10986-24009 |
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oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
DEBT SOURCE PUBLIC EXTERNAL DEBT CREDIT MARKETS PLEDGES DEFICIT HOLDING DEBT ACCUMULATION CAPITAL MARKETS DEBT SUSTAINABILITY ANALYSES INTERNATIONAL CAPITAL REAL INTEREST RATES PARTICULAR DEBT FISCAL DEFICITS INTEREST DEBTORS DEBT STOCK INTEREST RATE PRIVATE CREDIT EXCHANGE LOCAL GOVERNMENTS LIQUIDITY DEBT MANAGEMENT DEBT STATISTICS DEVELOPING COUNTRIES GOVERNMENT BORROWING REPAYMENTS REAL INTEREST TOTAL DEBT INTERNATIONAL CAPITAL MARKETS EXPORTERS REVENUES PORTFOLIO LIQUIDITY RISK DOMESTIC DEBT MARKETS DEBT PORTFOLIOS DISCOUNT MULTILATERAL DEBT RELIEF MARKET ACCESS CURRENT ACCOUNT SURPLUSES INTERNATIONAL BANK DEBT BURDENS CREDITORS DEBT BURDEN CREDITOR CASH FLOWS INSTRUMENTS DEBT LEVEL OUTSTANDING DEBT STOCKS BUDGET INITIAL DEBT COMMERCIAL CREDITORS INDEBTEDNESS DOMESTIC CURRENCY NATURAL DISASTER DISBURSEMENT GRACE PERIODS ACCESS TO FINANCING PORTFOLIOS CURRENT ACCOUNT DEBTS MACROECONOMIC RISKS INTEREST RATES BANK DEBT TOTAL EXTERNAL DEBT NATURAL DISASTERS EXTERNAL INDEBTEDNESS MULTILATERAL CREDITORS MARKETS DEBT RETURN DEFICITS DEBT-RELIEF PUBLIC DEBT MANAGEMENT INTERNATIONAL DEBT DEBT SERVICING NEEDS MULTILATERAL DEBT DOMESTIC DEBT REAL INTEREST RATE AMORTIZATION PAYMENTS DEBT SERVICE TRUST FUNDS FINANCE CURRENT ACCOUNT DEFICITS EXPENDITURE DEBT LEVELS TRANSACTION DEBT SUSTAINABILITY ANALYSIS INTEREST PAYMENTS EXTERNAL DEBT STOCK DEBT REDUCTION EXTERNAL DEBT SERVICE COUNTRY DEBT DOMESTIC MARKETS LEGAL OBLIGATION FUTURE DEBT CRISES DEBT THRESHOLD COMMERCIAL TERMS RETURNS COMMERCIAL DEBT DEBT RELIEF INITIATIVES BUDGETS BAILOUTS REPAYMENT DEBT EXCHANGES CURRENT ACCOUNT DEFICIT INSTITUTIONAL CAPACITY DIVERSIFIED PORTFOLIOS FACE VALUE REAL EXCHANGE RATE DEBT STOCKS MARKET DEBT RATIOS NET PRESENT VALUE OF DEBT PUBLIC DEBT SOLVENCY PRIVATE DEBT MACROECONOMIC VARIABLES AVERAGE DEBT GOVERNMENT DEBT DEBT MARKETS STOCKS DEBT SERVICE REDUCTION INVESTMENT DEBT SERVICE OBLIGATIONS OUTSTANDING DEBT BILATERAL DONORS SHARE COMPOSITION OF DEBT DEBT RESTRUCTURING DEBT OBLIGATIONS EXTERNAL PUBLIC DEBT DEBT SERVICE PAYMENTS INSTITUTIONAL DEVELOPMENT DEBT REPAYMENTS EXTERNAL SHOCKS EXTERNAL DEBT INVESTMENTS TRUST FUND PUBLIC SECTOR DEBT DEBT THRESHOLDS DEBT FORGIVENESS SWAPS LEVEL OF DEBT AMOUNT OF DEBT EXTERNAL FINANCING MATURITIES DEBT SWAP EXCHANGE RATE DEBT SERVICING DEBT SUSTAINABILITY PUBLIC SPENDING DEBT CONVERSION BILATERAL CREDITORS LIABILITIES MARKET RETURNS DEBT REDUCTIONS EXTERNAL LIQUIDITY DEBT DYNAMICS CASH FLOW DEVELOPMENT BANK SWAP DEBT RELIEF BILATERAL DONOR INVESTING |
| spellingShingle |
DEBT SOURCE PUBLIC EXTERNAL DEBT CREDIT MARKETS PLEDGES DEFICIT HOLDING DEBT ACCUMULATION CAPITAL MARKETS DEBT SUSTAINABILITY ANALYSES INTERNATIONAL CAPITAL REAL INTEREST RATES PARTICULAR DEBT FISCAL DEFICITS INTEREST DEBTORS DEBT STOCK INTEREST RATE PRIVATE CREDIT EXCHANGE LOCAL GOVERNMENTS LIQUIDITY DEBT MANAGEMENT DEBT STATISTICS DEVELOPING COUNTRIES GOVERNMENT BORROWING REPAYMENTS REAL INTEREST TOTAL DEBT INTERNATIONAL CAPITAL MARKETS EXPORTERS REVENUES PORTFOLIO LIQUIDITY RISK DOMESTIC DEBT MARKETS DEBT PORTFOLIOS DISCOUNT MULTILATERAL DEBT RELIEF MARKET ACCESS CURRENT ACCOUNT SURPLUSES INTERNATIONAL BANK DEBT BURDENS CREDITORS DEBT BURDEN CREDITOR CASH FLOWS INSTRUMENTS DEBT LEVEL OUTSTANDING DEBT STOCKS BUDGET INITIAL DEBT COMMERCIAL CREDITORS INDEBTEDNESS DOMESTIC CURRENCY NATURAL DISASTER DISBURSEMENT GRACE PERIODS ACCESS TO FINANCING PORTFOLIOS CURRENT ACCOUNT DEBTS MACROECONOMIC RISKS INTEREST RATES BANK DEBT TOTAL EXTERNAL DEBT NATURAL DISASTERS EXTERNAL INDEBTEDNESS MULTILATERAL CREDITORS MARKETS DEBT RETURN DEFICITS DEBT-RELIEF PUBLIC DEBT MANAGEMENT INTERNATIONAL DEBT DEBT SERVICING NEEDS MULTILATERAL DEBT DOMESTIC DEBT REAL INTEREST RATE AMORTIZATION PAYMENTS DEBT SERVICE TRUST FUNDS FINANCE CURRENT ACCOUNT DEFICITS EXPENDITURE DEBT LEVELS TRANSACTION DEBT SUSTAINABILITY ANALYSIS INTEREST PAYMENTS EXTERNAL DEBT STOCK DEBT REDUCTION EXTERNAL DEBT SERVICE COUNTRY DEBT DOMESTIC MARKETS LEGAL OBLIGATION FUTURE DEBT CRISES DEBT THRESHOLD COMMERCIAL TERMS RETURNS COMMERCIAL DEBT DEBT RELIEF INITIATIVES BUDGETS BAILOUTS REPAYMENT DEBT EXCHANGES CURRENT ACCOUNT DEFICIT INSTITUTIONAL CAPACITY DIVERSIFIED PORTFOLIOS FACE VALUE REAL EXCHANGE RATE DEBT STOCKS MARKET DEBT RATIOS NET PRESENT VALUE OF DEBT PUBLIC DEBT SOLVENCY PRIVATE DEBT MACROECONOMIC VARIABLES AVERAGE DEBT GOVERNMENT DEBT DEBT MARKETS STOCKS DEBT SERVICE REDUCTION INVESTMENT DEBT SERVICE OBLIGATIONS OUTSTANDING DEBT BILATERAL DONORS SHARE COMPOSITION OF DEBT DEBT RESTRUCTURING DEBT OBLIGATIONS EXTERNAL PUBLIC DEBT DEBT SERVICE PAYMENTS INSTITUTIONAL DEVELOPMENT DEBT REPAYMENTS EXTERNAL SHOCKS EXTERNAL DEBT INVESTMENTS TRUST FUND PUBLIC SECTOR DEBT DEBT THRESHOLDS DEBT FORGIVENESS SWAPS LEVEL OF DEBT AMOUNT OF DEBT EXTERNAL FINANCING MATURITIES DEBT SWAP EXCHANGE RATE DEBT SERVICING DEBT SUSTAINABILITY PUBLIC SPENDING DEBT CONVERSION BILATERAL CREDITORS LIABILITIES MARKET RETURNS DEBT REDUCTIONS EXTERNAL LIQUIDITY DEBT DYNAMICS CASH FLOW DEVELOPMENT BANK SWAP DEBT RELIEF BILATERAL DONOR INVESTING Haque, Tobias Partow, Zeinab Varma, Sona Oliveira, Luiz Edgard Addressing Debt Vulnerabilities in Small States : The Potential Role of New Financing Instruments |
| geographic_facet |
Caribbean Oceania Sub-Saharan Africa |
| description |
The papers in this series aim to provide
a vehicle for publishing preliminary results on
Macroeconomics and Fiscal Management (MFM) topics to
encourage discussion and debate. This paper explores two new
financing mechanisms that multilateral and bilateral
development agencies could consider deploying to address
problems of debt sustainability in small states. In this
paper the authors provide an initial assessment of these
proposals, informed by analysis of small state indebtedness
and recent debt dynamics. Proposed financing instruments are
predicated on assumptions that small states face high levels
of indebtedness, and that reducing debt levels while
increasing climate resilience could sustainably reduce such
vulnerabilities. The authors find that levels of
indebtedness vary widely across small states. Analysis of
small state debt dynamics shows that small state debt
accumulation has been driven by large primary and current
account deficits and slow economic growth. Debt reduction
from new mechanisms can only be expected to be sustainable,
therefore, if countries simultaneously address the
macroeconomic imbalances driving debt accumulation. The
authors demonstrate that, while exposure to natural
disasters is likely to have exacerbated economic management
challenges in some small states, such exposures are unlikely
to be the only important cause of indebtedness. The authors
conclude that proposed new financing instruments can
potentially help reduce small state debt burdens and gain
fiscal space for climate adaptation but will not present a
sustainable solution to problems of small state debt risks
unless they involve macroeconomic and structural reforms to
address the underlying imbalances driving rapid debt accumulation. |
| format |
Working Paper |
| author |
Haque, Tobias Partow, Zeinab Varma, Sona Oliveira, Luiz Edgard |
| author_facet |
Haque, Tobias Partow, Zeinab Varma, Sona Oliveira, Luiz Edgard |
| author_sort |
Haque, Tobias |
| title |
Addressing Debt Vulnerabilities in Small States : The Potential Role of New Financing Instruments |
| title_short |
Addressing Debt Vulnerabilities in Small States : The Potential Role of New Financing Instruments |
| title_full |
Addressing Debt Vulnerabilities in Small States : The Potential Role of New Financing Instruments |
| title_fullStr |
Addressing Debt Vulnerabilities in Small States : The Potential Role of New Financing Instruments |
| title_full_unstemmed |
Addressing Debt Vulnerabilities in Small States : The Potential Role of New Financing Instruments |
| title_sort |
addressing debt vulnerabilities in small states : the potential role of new financing instruments |
| publisher |
World Bank, Washington, DC |
| publishDate |
2016 |
| url |
http://documents.worldbank.org/curated/en/2016/03/26067070/addressing-debt-vulnerabilities-small-states-potential-role-new-financing-instruments http://hdl.handle.net/10986/24009 |
| _version_ |
1764455513373802496 |
| spelling |
okr-10986-240092021-05-25T10:54:44Z Addressing Debt Vulnerabilities in Small States : The Potential Role of New Financing Instruments Haque, Tobias Partow, Zeinab Varma, Sona Oliveira, Luiz Edgard DEBT SOURCE PUBLIC EXTERNAL DEBT CREDIT MARKETS PLEDGES DEFICIT HOLDING DEBT ACCUMULATION CAPITAL MARKETS DEBT SUSTAINABILITY ANALYSES INTERNATIONAL CAPITAL REAL INTEREST RATES PARTICULAR DEBT FISCAL DEFICITS INTEREST DEBTORS DEBT STOCK INTEREST RATE PRIVATE CREDIT EXCHANGE LOCAL GOVERNMENTS LIQUIDITY DEBT MANAGEMENT DEBT STATISTICS DEVELOPING COUNTRIES GOVERNMENT BORROWING REPAYMENTS REAL INTEREST TOTAL DEBT INTERNATIONAL CAPITAL MARKETS EXPORTERS REVENUES PORTFOLIO LIQUIDITY RISK DOMESTIC DEBT MARKETS DEBT PORTFOLIOS DISCOUNT MULTILATERAL DEBT RELIEF MARKET ACCESS CURRENT ACCOUNT SURPLUSES INTERNATIONAL BANK DEBT BURDENS CREDITORS DEBT BURDEN CREDITOR CASH FLOWS INSTRUMENTS DEBT LEVEL OUTSTANDING DEBT STOCKS BUDGET INITIAL DEBT COMMERCIAL CREDITORS INDEBTEDNESS DOMESTIC CURRENCY NATURAL DISASTER DISBURSEMENT GRACE PERIODS ACCESS TO FINANCING PORTFOLIOS CURRENT ACCOUNT DEBTS MACROECONOMIC RISKS INTEREST RATES BANK DEBT TOTAL EXTERNAL DEBT NATURAL DISASTERS EXTERNAL INDEBTEDNESS MULTILATERAL CREDITORS MARKETS DEBT RETURN DEFICITS DEBT-RELIEF PUBLIC DEBT MANAGEMENT INTERNATIONAL DEBT DEBT SERVICING NEEDS MULTILATERAL DEBT DOMESTIC DEBT REAL INTEREST RATE AMORTIZATION PAYMENTS DEBT SERVICE TRUST FUNDS FINANCE CURRENT ACCOUNT DEFICITS EXPENDITURE DEBT LEVELS TRANSACTION DEBT SUSTAINABILITY ANALYSIS INTEREST PAYMENTS EXTERNAL DEBT STOCK DEBT REDUCTION EXTERNAL DEBT SERVICE COUNTRY DEBT DOMESTIC MARKETS LEGAL OBLIGATION FUTURE DEBT CRISES DEBT THRESHOLD COMMERCIAL TERMS RETURNS COMMERCIAL DEBT DEBT RELIEF INITIATIVES BUDGETS BAILOUTS REPAYMENT DEBT EXCHANGES CURRENT ACCOUNT DEFICIT INSTITUTIONAL CAPACITY DIVERSIFIED PORTFOLIOS FACE VALUE REAL EXCHANGE RATE DEBT STOCKS MARKET DEBT RATIOS NET PRESENT VALUE OF DEBT PUBLIC DEBT SOLVENCY PRIVATE DEBT MACROECONOMIC VARIABLES AVERAGE DEBT GOVERNMENT DEBT DEBT MARKETS STOCKS DEBT SERVICE REDUCTION INVESTMENT DEBT SERVICE OBLIGATIONS OUTSTANDING DEBT BILATERAL DONORS SHARE COMPOSITION OF DEBT DEBT RESTRUCTURING DEBT OBLIGATIONS EXTERNAL PUBLIC DEBT DEBT SERVICE PAYMENTS INSTITUTIONAL DEVELOPMENT DEBT REPAYMENTS EXTERNAL SHOCKS EXTERNAL DEBT INVESTMENTS TRUST FUND PUBLIC SECTOR DEBT DEBT THRESHOLDS DEBT FORGIVENESS SWAPS LEVEL OF DEBT AMOUNT OF DEBT EXTERNAL FINANCING MATURITIES DEBT SWAP EXCHANGE RATE DEBT SERVICING DEBT SUSTAINABILITY PUBLIC SPENDING DEBT CONVERSION BILATERAL CREDITORS LIABILITIES MARKET RETURNS DEBT REDUCTIONS EXTERNAL LIQUIDITY DEBT DYNAMICS CASH FLOW DEVELOPMENT BANK SWAP DEBT RELIEF BILATERAL DONOR INVESTING The papers in this series aim to provide a vehicle for publishing preliminary results on Macroeconomics and Fiscal Management (MFM) topics to encourage discussion and debate. This paper explores two new financing mechanisms that multilateral and bilateral development agencies could consider deploying to address problems of debt sustainability in small states. In this paper the authors provide an initial assessment of these proposals, informed by analysis of small state indebtedness and recent debt dynamics. Proposed financing instruments are predicated on assumptions that small states face high levels of indebtedness, and that reducing debt levels while increasing climate resilience could sustainably reduce such vulnerabilities. The authors find that levels of indebtedness vary widely across small states. Analysis of small state debt dynamics shows that small state debt accumulation has been driven by large primary and current account deficits and slow economic growth. Debt reduction from new mechanisms can only be expected to be sustainable, therefore, if countries simultaneously address the macroeconomic imbalances driving debt accumulation. The authors demonstrate that, while exposure to natural disasters is likely to have exacerbated economic management challenges in some small states, such exposures are unlikely to be the only important cause of indebtedness. The authors conclude that proposed new financing instruments can potentially help reduce small state debt burdens and gain fiscal space for climate adaptation but will not present a sustainable solution to problems of small state debt risks unless they involve macroeconomic and structural reforms to address the underlying imbalances driving rapid debt accumulation. 2016-04-05T19:47:42Z 2016-04-05T19:47:42Z 2016-03 Working Paper http://documents.worldbank.org/curated/en/2016/03/26067070/addressing-debt-vulnerabilities-small-states-potential-role-new-financing-instruments http://hdl.handle.net/10986/24009 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper Caribbean Oceania Sub-Saharan Africa |