Marrakech [Morocco] : The World Bank and the International Monetary Fund are set to lead discussions on how developing countries can enhance their resilience to debt risks and guarantee continued funding for critical sectors such as healthcare and infrastructure.
The event is scheduled for October 12 and aims to explore strategies for enhancing nation's debt management capabilities while addressing the pressing issue of sovereign debt sustainability.
Governments must finance investment in economic growth and development through public debt, which is known as sovereign debt.
To maintain the capacity to serve this debt and ensure its sustainability are equally crucial. Debt distress can impact a nation's development process and jeopardize macroeconomic stability.
The IMF's focus is on managing debt risks and addressing debt distress, taking various forms.
The IMF's analysis plays a crucial role in analyzing sovereign debt risks and offering early-stage policy advice. The IMF collaborates with the World Bank to improve debt transparency and strengthen nations' capacity to report and manage their public debt.
Member nations provide technical assistance in the creation of debt management strategies and the creation of local currency bond markets, fostering a robust debt structure capable of overcoming economic shocks.
A combination of adaptation measures and growth-restoration strategies is necessary for countries with high debt vulnerability. The IMF can facilitate these adjustments through its support programs.
The IMF's financial assistance can only extend if a member's debt is deemed sustainable. The government is responsible for negotiating debt restructuring with its creditors in cases where debt is not sustainable despite the adjustments.
An IMF-backed program can assist a member nation in the context of debt restructuring by providing sound economic policies and new financing, enabling a return to macroeconomic stability.
The IMF is also actively engaged in enhancing the international framework for sovereign debt restructurings, aiming to speed up and enhance debt reduction efforts.
The Global Debt Database, a comprehensive database of debt-related information, has been developed to assist policymakers and researchers.
The GDD provides data from 1950, covering an extensive panel of 190 advanced economies, emerging market economies, and low-income countries.
The database is crucial in assessing debt vulnerability and analyzing trends in debt accumulation.
Many developing and low-income economies are grappling with significant debt burdens, hindering their ability to invest in crucial sectors like education, healthcare, social protection, and infrastructure.
Some nations are experiencing a financial crisis that has seen their debt levels plummet to unsustainable levels. Thisupcoming seminar will explore strategies to boost resilience against debt risks, encompassing domestic reforms to foster growth, enhance expenditure policies, enhance domestic revenue mobilization, and fortify debt management practices.
The discussions will also show the need for greater support from the global community.
This assistance includes concessional financing and technical assistance, as well as improvements in sovereign debt restructuring measures. The aim is to provide quick and dependable debt relief when necessary.
On October 12 the IMF and the World Bank invited all stakeholders to participate in this discussion. The seminar aims to establish a path toward sustainable economies and a brighter future for all.