Conference on Financing for Development
Department of Public Information - News and Media Services Division - New York
|Monterrey, NL, Mexico
18-22 March 2002
19 March 2002
PRESS CONFERENCE BY SECURITIES INDUSTRIES ASSOCIATION
Instances of sovereign default on debt, the most recent case being Argentina, indicated the growing and vital need for international debt restructuring, an expert on the subject said at a press conference this afternoon.
Frank Fernandez, Chief Economist, Securities Industries Association, said the absence of an international debt court had inhibited development finance for a number of decades, thus, blocking the progress of poor countries. The ad hoc process for resolving sovereign default was very painful, tying up private sector funds and leading to very slow growth
It behooved the international community to try and make the process more manageable in the fight to eradicate poverty, in the absence of dialogue between the creditor and debtor countries, he said. Various mechanisms were being considered on the legislative, contractual or market-based levels. It would be an ongoing process after the Conference.
Also present was Richard Gitlin, a partner with Bingham Dana, L.P, who said that any conference on development must deal with fundamental issues in order to attract financing; otherwise, there would be no development. Problems of debt must be handled rapidly, efficiently and fairly.
He pointed out that, in the so-called lost decade of the 1980s, Latin America had seen no growth in per capita income or social welfare. Efforts by the International Monetary Fund (IMF) to address the problem had been grossly inadequate so far and had brought adverse reactions from the market.