SouthViews No. 115a, 26 March 2015

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…)

SouthViews No. 111, 17 September 2014

Battle Hots Up to Curb ‘Vulture Funds’

By Martin Khor

Many countries are facing a worsening debt situation, and thus feel the urgency to curb ‘vulture funds’ and to set up a global debt restructuring mechanism. External debt is rearing its ugly head again. With the global economic slowdown, lower commodity prices and less tourism, many developing countries are facing reduced export earnings and foreign reserves. No country would like to have to seek the help of the International Monetary Fund to avoid default. That could lead to years of austerity, high unemployment, cuts in social development and at the end of it, still no light at the end of the tunnel. (more…)

SouthViews No. 52, 28 January 2013

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.



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