STATEMENT BY DR. CARLOS CORREA, EXECUTIVE DIRECTOR OF THE SOUTH CENTRE, TO THE MINISTERS AND GOVERNORS MEETING OF THE INTERGOVERNMENTAL GROUP OF TWENTY-FOUR (G24)
The world economy is showing signs of recovery, yet very uneven, and is facing a multitude of challenges including rising inequality within and among countries, vaccine nationalism in the face of raging COVID-19 variants, escalated debt burden for many developing countries, ravages of climate change and weakening multilateralism.
Now, we are at a pivotal moment to mend and fix the global systemic problems so that we can recover better, greener, more inclusively, and more resiliently. It is time to address root causes of the fragility, instability, divergence and asymmetries of the global economy.
Systemic reform of the international debt architecture is yet to start
By Yuefen Li
The COVID-19 pandemic has pushed the reform of the international debt architecture to the policy agenda. Up to now policy measures to address the crushing debt burden of developing countries have focused on boosting time bound liquidity provision, which is insufficient in amount and restrictive in scope as debt-ridden and pandemic struck middle-income countries have not been covered. Even the implementation of these policy measures has been hindered by existing systemic problems. The reform of the debt architecture is yet to start. However, complacency seems to emerge. The risk of “wasting” the crisis should be avoided.
South Centre Statement to the Ministers and Governors Meeting of The Intergovernmental Group of Twenty-Four (G24)
At the G-24 spring meeting, an important part of the discussion was about how COVID-19 could result in a setback to the fragile recovery of the world economy from the global financial crisis. Six months later, the current international discussions are about how long the pandemic will remain unchecked and how deep the world economic recession will be. Developing countries are licking their wounds and alarmed at the big financing gap between their plummeted fiscal revenue and skyrocketing financing needs for the pandemic response. The situation is dire. The world has passed the tragic milestone of losing one million lives to the pandemic. Some of the hard-won achievements made in implementing the Millenium Development Goals (MDGs) and Sustainable Development Goals (SDGs) have been reversed. Poverty and hunger will increase for the first time since the 1990s, the number of people facing starvation may double, gender and income inequality has been further widened as a result of the pandemic.
Challenges of Investment Treaties on Policy Areas of Concern to Developing Countries
By Kinda Mohamadieh
Country experiences have revealed that international investment agreements (IIAs) could have an adverse policy impact on various policy areas that are generally important for developing countries in relation to the achievement of their development objectives. This policy brief gives an overview of challenges resulting from IIAs to major policy areas of concern to developing countries. These policy areas include industrial policy, tax reform, handling debt crisis, the use of capital controls, intellectual property rights, public-private partnerships, and climate change action in relation to investment in clean technologies.
Past Mistakes and Current Joint Responsibilities: the Greek debt crisis
By Yuefen Li
With the Greek debt crisis raging on, another round of blame exercise has started. It is not really unhealthy to do so, as with it comes the responsibilities for fixing the crisis. Looking back over the years since Greece joined the euro zone in 2001, it would be correct to say that the Troika -the European Central Bank (ECB), the International Monetary Fund (IMF), the European Commission (EC) – as well as the Greek government all have had their share of misjudgments, illusions, technical errors and political prejudices, though some parties more than the others. (more…)
Can the World Afford to Put All Hopes on Debt Contract Improvements for Sovereign Debt Workout?
By Yuefen Li
The lack of a formal sovereign debt restructuring mechanism has been considered by many as a serious deficit or missing link in the international financial architecture. However, even though the international debates on the topic have been going on for decades, heating up each time with the onset of a debt crisis and cooling down when the crisis was contained, up to now such debates have not yet come to fruition. With the onset of the global financial crisis and especially the legal litigation against Argentina and Greek debt crisis, the debate has become even more intensified with views more convergent than ever on the need of a mechanism. For decades, timely and orderly sovereign debt restructuring which can restore medium term debt sustainability to debtor countries as well as less costly to creditors has been the common expectation of stakeholders involved in sovereign debt restructuring, except those who want to get their windfalls in the debt crisis. (more…)
Resolving Debt Crises: How a Debt Resolution Mechanism Would Work
By Martin Khor
More countries are facing a debt crisis, and the world urgently needs an international system of debt arbitration and restructuring. This article describes the elements needed in such a system.
Statutory Sovereign Debt Workout Mechanisms: Why And How?
The following paper by the South Centre (authored by its Chief Economist Yilmaz Akyuz ) was presented by the Centre’s Executive Director at the UN General Assembly special event on sovereign debt crises and restructurings, held in New York on 20 October 2012.