Debt Transparency in Developing Economies
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 pub...
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| Language: | English |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/undefined/743881635526394087/Debt-Transparency-in-Developing-Economies http://hdl.handle.net/10986/36505 |
| Summary: | 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. |
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