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Multi-stakeholder Consultations on Financing for Development

Dialogues managed by FfDO

Sovereign debt for sustained development

General background information

Given the economic and social turmoil associated with sovereign debt crises in low and middle-income countries over the past years, there has been a flurry of proposals and some internationally endorsed reforms for treating external sovereign debt before, during and after financial crises. While there has been a great deal of discussion, the different stakeholders rarely address each other at the same time and at a practical policy and operational level. The consultations on debt would facilitate such conversations, taking advantage of existing international debt management forums to bring together debt managers and policy makers, analysts and other stakeholders relevant to borrowing governments and their external private and official creditors. The working hypothesis is that through such discussions, policies and operational processes can be sharpened and ownership of relevant stakeholders in policy reforms can be bolstered.

These multi-stakeholder consultations would, inter alia, support the process begun in the Bretton Woods institutions to strengthen the methodology for assessing the debt-carrying capacity of middle and low-income country governments, as well as the initiatives begun in the private sector around drafting a "code of conduct" that debtors and creditors might follow during both normal times and periods of financial stress. The consultations would aim to strengthen the asset class of private sovereign borrowing by "emerging economies" and bring increasing numbers of countries into this market in a sustainable way. It would equally support the ongoing effort to help official creditors structure their export credit and development assistance instruments to meet the needs and realistically assessed capacities of their partner countries and help the latter decide which obligations to accept without unduly raising risk for themselves and their other creditors. In a word, the aim of the discussions would be to identify converging views on best practices at the interface of debt management and debt policy for the years ahead.

The multi-stakeholder dialogue on debt, like that on inclusive finance, will build on other initiatives that will feed into the dialogue. One is a book project being jointly organized with the Initiative for Policy Dialogue at Columbia University. The project will produce a set of survey papers that should be available in the fall of this year. Second is a project being undertaken by the United Nations Development Programme in cooperation with the governments of six low-income countries, wherein a UNDP expert will study the country’s debt situation, debt sustainability and resource needs, in particular for realizing the Millennium Development Goals. Each study is to be discussed, inter alia, in a national multi-stakeholder consultation in 2004. Outcomes of that process will also be made available to the FfD dialogue as inputs. Third, a private sector advisory group for the multi-stakeholder consultation on debt is in formation at the Business Council for the United Nations, and a comparable civil society advisory group is also in formation, which will be based in Europe but link to various networks elsewhere working on debt issues.

Contact

The Office is also interested in receiving proposals, queries and comments from interested entities and individuals around the world. Please address them to ffdoffice@un.org.

 
 
 

Financing for Development Office, 2 U.N. Plaza (DC2-2170), New York, N.Y. 10017
Email: ffdoffice@un.org, Fax: 212-963-0443, Website: www.un.org/esa/ffd