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About two months ago I raised 5 questions I thought were important in determining how debt relief initiatives (esp. DSSI) will work for resource-rich countries. Here is an update on unfolding answers so far. (1/n) https://resourcegovernance.org/blog/five-questions-how-debt-relief-initiatives-will-work-resource-rich-countries">https://resourcegovernance.org/blog/five...
1. Will debt relief initiatives cover Chinese resource-backed loans (RBLs)?
Unresolved. Some key Chinese SOE lenders of RBLs (esp. CDB) apparently refusing to take part in DSSI but facing push back. https://www.ft.com/content/e0673a53-7fee-4ef7-baaf-66cc97ee3296">https://www.ft.com/content/e...
Unresolved. Some key Chinese SOE lenders of RBLs (esp. CDB) apparently refusing to take part in DSSI but facing push back. https://www.ft.com/content/e0673a53-7fee-4ef7-baaf-66cc97ee3296">https://www.ft.com/content/e...
In Angola an RBL renegotiation between Sinopec and Sonangol is taking bilateral route. According to @china_brief talks go beyond single year freeze, possible restructuring in exchange for infrastructure assets& increased stake in oil fields. https://www.clbrief.com/imf-awaiting-china-angola-debt-deal/">https://www.clbrief.com/imf-await...
2. Will debt relief initiatives cover loans from commodity traders?
Not for now. While private sector lender groups stress intent to help in relief, they are yet to provide any. In contrast (?) oil traders have not yet made any empty promises. https://www.iif.com/Publications/ID/4003/Progress-Update-on-Private-Sector-Engagement-in-the-G20-Debt-Service-Suspension-Initiative-DSSI">https://www.iif.com/Publicati...
Not for now. While private sector lender groups stress intent to help in relief, they are yet to provide any. In contrast (?) oil traders have not yet made any empty promises. https://www.iif.com/Publications/ID/4003/Progress-Update-on-Private-Sector-Engagement-in-the-G20-Debt-Service-Suspension-Initiative-DSSI">https://www.iif.com/Publicati...
3. What will happen to state-owned enterprises’ (SOE) debt?
Unclear. The DSSI relief in theory covers SOE debt with explicit government guarantees. In practice we don& #39;t know how much of current debt freeze relates to SOEs.
Unclear. The DSSI relief in theory covers SOE debt with explicit government guarantees. In practice we don& #39;t know how much of current debt freeze relates to SOEs.
But in recent speech @DavidMalpassWBG urged to extend eligibility "to all external long-term public and publicly guaranteed debt, including the external debts of SOEs with either explicit or implicit government guarantees." https://www.worldbank.org/en/news/statement/2020/07/18/world-bank-group-president-david-malpass-remarks-at-the-g20-finance-ministers-and-central-bank-governors-meeting">https://www.worldbank.org/en/news/s...
4. Will debt relief initiatives deal w corruption/ transparency?
TBD. A large number of countries have committed to put in place anti-corruption measures as part of their @IMFNews financial assistance program. https://blogs.imf.org/2020/07/28/corruption-and-covid-19/">https://blogs.imf.org/2020/07/2...
TBD. A large number of countries have committed to put in place anti-corruption measures as part of their @IMFNews financial assistance program. https://blogs.imf.org/2020/07/28/corruption-and-covid-19/">https://blogs.imf.org/2020/07/2...
These center on #covid19 spending monitoring: publish procurement contracts, expenditure&audit reports, beneficial ownership info (ht @anticorruption). A big leap for some countries w. opaque budgeting+unclear how it deals with fungibility problem. https://www.transparency.org/en/imf-tracker ">https://www.transparency.org/en/imf-tr...
5. Will short-term debt relief suffice to get out of the current crisis?
TBD. The IMF/WB have endorsed the idea of extending debt suspension to 2021. The G20 will decide on extensions in the Fall. https://g20.org/en/media/Documents/Final%20G20%20FMCBG%20Communiqu%C3%A9%20-%20July%202020.pdf">https://g20.org/en/media/...
TBD. The IMF/WB have endorsed the idea of extending debt suspension to 2021. The G20 will decide on extensions in the Fall. https://g20.org/en/media/Documents/Final%20G20%20FMCBG%20Communiqu%C3%A9%20-%20July%202020.pdf">https://g20.org/en/media/...
But there is now also an increased recognition that many DSSI countries will need debt restructuring rather than freezing. This is especially true of oil producers who are facing a permanent shock, as I argued here: https://resourcegovernance.org/blog/imf-optimism-and-oil-dependent-countries-be-wary-sunny-projections-0">https://resourcegovernance.org/blog/imf-... (end).
