Las posibilidades de una auditoria a la deuda pública
Autor: Corporación de Investigación Social y Económica- CIASE
[Introducción]: La deuda pública es un tema que implica amplio debate y análisis, dado que involucra el ámbito local nacional e internacional. No existen consensos frente a tres aspectos: al pago o no pago de la deuda pública, si es una herramienta que contribuye o no de manera efectiva la realización de derechos y si es una opción para permitir los procesos de desarrollo o es un impedimento para éstos.
Este documento tiene como finalidad hacer un acercamiento al análisis de la deuda pública en Colombia, buscando mostrar sus particularidades y cuál puede ser una propuesta de auditoria realizable; explicando cuál serÃa la posición frente a la deuda ilegÃtima en este contexto.
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Reflexiones sobre la Cooperación Internacional
By LATINIDADD
El presente artÃculo hace una revisión de la cooperación internacional haciendo referencia a la calidad, cantidad y modalidad de la ayuda extranjera. El artÃculo enfatiza que aunque se han dado algunos pasos, todavÃa la cantidad y la calidad de la ayuda están muy lejos de ser suficientes para alcanzar los ODM y otras metas sociales y de desarrollo. Asimismo, la ayuda para el desarrollo se ha estado dando principalmente en forma de alivio de deuda y no como una transferencia de recursos frescos.
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Consenso de Monterrey: Evaluación y recomendaciones desde la realidad de América Latina
Autor: LATINIDAD
Este artÃculo analiza la aplicación del Consenso de Monterrey en el contexto de Latino América. En particular, sostiene que si bien el servicio de deuda se redujo ligeramente a inicios de la iniciativa HIPC, el impacto no fue mayor, la deuda externa volvió a incrementarse. A su vez, uno de los principales impactos de las condonaciones es el encarecimiento del nuevo financiamiento externo y la menor disponibilidad de las ventanillas concesionales. Esto se agrava aún más si consideramos que los paÃses están acudiendo además a otro tipo de endeudamiento: la deuda interna.
En este sentido, la aseveración sobre la “sostenibilidad†de deuda que los paÃses han alcanzado no es totalmente cierta. Por un lado, porque no se está considerando toda la deuda; y por otro lado, no es suficiente porque no mide la capacidad de cubrir la deuda social con la población.
El artÃculo sostiene que la implementación del Consenso de Monterrey aun tiene brechas importantes que cubrir, compromisos que asumir y transformaciones a realizar, de acuerdo a los nuevos roles de algunos organismos financieros internacionales, e impulsando los cambios hacia una arquitectura financiera justa.
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Shaking Up Development Finance in Latin America
By C. P. Chandrasekhar & Jayati Ghosh
The article analyses the emergence of the Bank of the South as an answer to the general disillusionment with the role of the International Financial Institutions (IFIs) in the region. These include not only the International Monetary Fund (IMF) and the World Bank (WB), but also the Inter-American Development Bank (IDB), which has some participation from Latin American countries but is dominated by the US
The article present data on how IFIs have contributed little to development finance in Latin America in recent years. Indeed, in the Latin American region the IFIs - and official finance generally – have been negative net contributors to resources for development.
For most of the recent period, the IMF has been a large recipient of repayment flows from countries in the region. The net amounts provided by the WB to the region since the late 1990s have been paltry, and since 2002 they have been negative as well. Even the IDB - the other large multilateral creditor – has been receiving net inflows from the region.
The only consistently positive – albeit relatively small – source of net finance has come from bilateral aid – and in recent years this has been dominated by intra-regional assistance, as oil-rich countries like Venezuela have provided finance for smaller countries.
In this sense, the creation of the Bank of the South is part of a broader trend within Latin America of governments increasingly distancing themselves from the IFIs that are widely perceived as too biased in favour of US interests and too insistent on providing rigid and undesirable policy advice. If this plan succeeds even partially, it is an important source of hope for the rest of the developing world.
HIPC Funded Projects (2002-2005): What Impact?
SEND Foundation
The Government of Ghana opted for the country to be classified as a Highly Indebted Poor Country (HIPC) in order to take advantage of the improved macroeconomic stability and the substantial external assistance associated with the HIPC initiative to implement the reform agenda in the Ghana Poverty Reduction Strategy (GPRS)1. Since 2002, District Assemblies have been given various funds under the HIPC initiative to undertake poverty reduction projects. The study assessed the impact of first generation (2002-2005) HIPC funded projects in the 42 resource-poor districts in Ghana in the areas of Education, Health and Water & Sanitation. Our findings show that availability of essential services has increased in most districts. However, accessibility to, and effective utilisation of these facilities are mixed. The study posits that making facilities available is good but their effective utilisation by intended beneficiaries is of greater importance to eradicate poverty. The study further explored the causes of abandonment and ineffective use of facilities. The main findings of the study are described as follows:
Availability, Utilisation and Accessibility
1. The HIPC initiative has improved the availability of essential services in most districts. Out of the total 836 projects considered, about 89.2% are available and in use while 10.8% have been abandoned.
2. However, not all of the 89.2% available and utilised projects were in effective use. Where facilities were in effective use, improved changes were observed in those communities.
3. The health sector, which benefited least in terms of project distribution compared to the education and water & sanitation sectors, ranked highest in terms of abandoned projects. Taking southern Ghana as an isolated case, approximately 34.2% of health projects have been abandoned.
4. A comparative assessment of the performance of the northern and southern Ghana indicated that the former outperformed the latter in terms of management of HIPC funds to ensure functional projects.
5. Distribution of development projects under HIPC was not equitable in relation to People With Disability (PWD). Specialized establishments such as special schools for the blind etc were not supported under the initiative. Again, with the exception of the Yendi and Savelugu Nanton districts, all other DAs failed to incorporate the special needs of PWD in the design of physical projects.
Changes associated with Projects
6. School management improved tremendously in most communities after the completion of classroom blocks and/ or teachers’ quarters. Schools which operated under trees/ sheds and in shifts now have classrooms and operate in one stream.
7. Generally, enrolment improved in HIPC funded schools which benefited classroom facilities. But unlike the observation in northern Ghana which was consistent with national trend, a decline in enrolment was observed in southern Ghana. Poverty and ignorance about the importance of education were noted to underlie the problem of low enrolment. Accessibility to classroom projects in northern Ghana was enhanced due to the sensitization and support
activities provided by some NGOs which resulted in increased enrolment in the northern zone.
8. Maternal deaths and fatalities associated with emergencies reduced in communities with functional clinics/CHPS centres.
9. Most of the facilities expected to be community owned such as the KVIPs suffered ownership and management problems. Fundamental to these problems is the low capacity of some assembly members and the ineffectiveness of the sub-structures of the district assemblies which resulted in the low participation of the grassroots in decision-making.
Factors affecting Project Availability, Accessibility and Effective Utilisation
10. Inadequate and irregular release of funds from the Ministry of Finance coupled with some counterproductive directives from the Auditor-General’s Department; indebtedness of some DAs to contractors; poor commitment of some contractors, consultants and DAs; and ineffective planning including poor coordination between some DAs and the decentralised departments were observed to constitute the main determinants for the unavailability of some projects.
11. Poor stakeholder involvement in the selection and implementation of projects accounted for the poor access and ineffective utilisation of some facilities.
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External Debt and Financing for Development
Author: Hellen Grace Akwii-Wangusa, Anglican Observer and Personal Representative of the Arch Bishop of Canterbury to the United Nations
This article critiques three instruments used by IFIs for managing development country debt (and used by other donors and private parties to engage with them). They are the concept of debt sustainability, the Highly Indebted Poor Countries (HIPC) Initiative and Conditionality.The are deemed ineffective in effectively managing debt. New instruments and systems have been developed to improve debt management, including safer debt structure, new forms of lending and credit default swaps. However, at best, these new "instruments" are inadequate remedies for the debt condition that have reached desperate and chronic levels.Instead, the author ultimately calls for amongst other things, cancellation of debt guided by the Jubilee principle, since the external debt burden was entered into dishonestly by both donors and recipients who are no longer in positions of decision making and power. These unjustified unsustainable debts continue to breed angers and discontent.
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Debt and Conditionality: Multilateral Debt Relief Initiative and Opportunities for Expanding Policy Space
Source: Third World Network
THE Multilateral Debt Relief Initiative (MDRI) was introduced in September 2005 to operationalise the political outcome of deliberations at the G8 summit in Gleneagles in July 2005. The MDRI is to provide 100% cancellation of eligible debt stock owed by eligible countries to four multilateral financial institutions – the International Development Association (IDA), the concessional lending arm of the World Bank, the International Monetary Fund (IMF), the African Development Fund (ADF) and the Inter-American Development Bank (IDB)1 – and is separate from but linked operationally to the enhanced Heavily Indebted Poor Countries initiative (HIPC-I).
This debt reduction is additional to the debt relief granted under the HIPC-I and taken together, it is expected that an estimated 40 eligible countries have already been or will be relieved of a significant amount of debt stock in the near future. The World Bank and the IMF estimate that both the HIPC-I and the MDRI will clear a total of close to US$90 billion in debt owed by developing countries to bilateral and multilateral creditors (Eurodad, 2006; IDA and IMF, 2006: paras 27-32). Twenty-one countries have already had their eligible debt from the IDA and the IMF written off and nine other countries are expected to complete the process in the near future. A further 10 countries have met the eligibility criteria for HIPC and are potentially eligible for MDRI relief in the future.
A critical question arising from these recent developments in debt relief is whether – aside from relieving the debt overhang of indebted countries and therefore clearing fiscal space for more productive and redistributive expenditure – the cancellation of debt, particularly from the international financial institutions (IFIs), results in greater policy autonomy for the countries concerned.
A significant constraint on national policy space in developing countries in the past two decades has been the uncompromising debt burden shouldered by these countries and the policy prescriptions which accompany country attempts to: (a) reschedule debt owed to external creditors; and (b) mobilise additional external financial resources to meet their resource gaps. Indebted countries have had to implement stringent economic conditionalities – especially those set by the World Bank and the IMF – in their bid both to renegotiate debt and to secure resources necessary for generating economic growth and financing social expenditure.
However, the recent series of debt cancellations – under both the enhanced HIPC and the MDRI – may offer eligible countries opportunities for expanding domestic policy space, enabling countries greater freedom over their macroeconomic and development policies, including options which were prohibited under the restrictive conditionalities of the Bretton Woods institutions.
This paper examines the key aspects of the MDRI and considers the opportunities this framework and completion of the enhanced HIPC initiative create for indebted countries to expand their policy space. The paper concludes that the recent upfront and irrevocable cancellation of debt of the 21 post-‘completion point’ countries and the potential debt relief for the nine ‘decision point’ countries in the near future under the enhanced HIPC initiative and the MDRI will create opportunities for greater policy space in these countries. Specifically, the debt relief will facilitate the release of countries from the economic strictures of conditionality and debt which have crippled economies in developing countries due to the damaging effect of their economic policy prescriptions.
Cancellation of debt stock has not only enabled the freeing up of fiscal resources in a number of previously heavily indebted developing countries but has also afforded opportunities for expanded policy space for countries to develop national economic policies alternative to the Washington Consensus policy prescriptions which have accompanied financing from the Bretton Woods institutions.
It will also enable the diversification of external financing sources for these countries, enabling countries to seek resources with more favourable financing terms and the decoupling of financial resources with economic policy reforms. Countries should take advantage of this increased policy autonomy to develop more appropriate policies which will generate economic growth in favour of social and economic development.
After all, the objectives of debt relief are not only about increasing revenue flows to developing countries but also freeing countries from the economic and political coercion of debt, including redressing the asymmetrical relationship between debtor and creditor nations and debtor nations and international financial institutions. This recent debt cancellation may afford developing countries the opportunity to break out of the cycle of debt and conditionality and to engender genuine ‘country ownership’ of economic policies.
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Foreign Aid and the National Reform Agenda: The Case of Lebanon
Written by Mr Ziad Abdel Samad, Executive Director of the Arab NGO Network for Development
Lebanon witnessed a 15 year civil war (1975-1990) that caused massive physical destruction and huge human losses. During the post war reconstruction period (1990-2007), Lebanon became a highly indebted country, whereby debt currently constitutes almost 200% of the GDP.
Since September 2004 Lebanon is witnessing an ongoing deep structural and political crisis. In July 2006, Israel launched a war against Lebanon causing huge direct and indirect losses estimated to reach over 9 billion US dollars.
The donor community convened in “Paris III Conference†during early 2007 and pledged more than 7.6 billion US dollars to support Lebanon. Paris III conference had three main objectives: (1) providing direct support for the post war reconstruction plan, (2) securing cash for the due debt services and (3) covering the budgetary deficit. A new reform program was promised by the government in return to these pledges; it includes significant economic and structural reform including privatization, tax increases, labour law reform, and reforms to the social security system. This program was the result of national public efforts supported by a World Bank team. The International Monetary Fund was delegated to monitor the implementation of the reform process and the multinational consultancy firm Booz Allen Hamilton was contracted to provide technical assistance to the public administration and oversee the coordination of efforts within the reform process.
In exchange, Lebanon pledged to increase growth rate by promoting foreign investment and enhancing competitiveness. This implies the integration of Lebanon in the global economic system and the promotion of trade liberalization. Unfortunately, all this process is perceived as a target in itself instead of being understood as a factor towards enhancing development, thus adopting it within the framework of a national developmental strategy.
In order to reduce the budgetary deficit, the government tends to increase public revenues by reforming the tax policy, mainly based on increasing the VAT. This is because Lebanon adopted a new tariff rate in the year 2000 which halved custom revenue. Unfortunately, these low tariff rates (mostly ranging between 5% and 10%) were adopted as well under Lebanon’s obligations in its accession package to the World Trade Organization.
On the other hand, the government is working towards privatizing two major sectors in the near future: communications and power. The main objectives of this privatization are: (1) to secure cash flow to pay the due debt services, (2) to overcome the inefficiency of the public administration and (3) to enhance competitiveness.
Consequently, Lebanon is a clear model of the interlink between foreign aid and the reform agenda which is not necessarily the result of a dialogue reflecting national priorities but it is a strategy proposed according to the donors’ vision.
Debt-Relief Countries Can Make Use of More Policy Space
Source: Third World Network
This article argues that it is crucial that post-‘completion point’ countries which have had their debt stocks cancelled under the HIPC initiative and the MDRI manage the policy space that they have acquired as a result, appropriately.
They should also be aware of and be on guard against corresponding measures currently pursued by the Bretton Woods institutions and other bilateral and multilateral creditors to circumscribe this newly expanded policy autonomy. The IMF and World Bank may want to continue to determine policies in the countries that have had their debts cancelled, in some cases even if these are not tied to new loans.
The measures used by these institutions to ensuretheir continued influence include:
(1) The introduction of the Policy Support Instrument (PSI) by the IMF, a non-borrowing Fund-monitored programme of reforms that a country may enter into voluntarily with the institution, and
(2) The IDA’s new modalities of aid allocation based on the performance of the ‘quality’ of their policies and institutions and rewarding countries which perform well under the controversial Country Policy and Institutional Assessment (CPIA) with larger volumes and more flexible modalities of financing.
The CPIA has been criticised for its lack of transparency and coherency in performance indicators and the controversial breadth of its coverage, including prescriptions on a range of economic and governance issues, such as a country’s ‘economic management’ and ‘quality of public administration’ as well as its ‘policies for social inclusion/equity’.
Although the CPIA indicators are not formally ‘conditionalities’ per se, there is pressure for countries to implement certain policies due to its link to World Bank, and especially IDA, financing.
Meanwhile, the PSI enables the IMF to act as a credit-rating agency for low-income countries by signalling economic health to potential creditors and investors. Policy reforms under a PSI will carry the same discipline as that of regular upper credit tranche conditionality and successful completion of a programme review by the IMF Executive Board ‘would signify the Fund’s assessment that the program is on track’, similar to reviews under financed Fund programmes - the only difference being that this does not trigger tranche disbursements.
In light of the policy space freed up by debt relief, countries therefore need to be cognisant of forms of conditionality which may accompany either the ‘signalling role’ of the IMF or the new financing from the IDA in the post-debt relief period and weigh the cost and benefits of contracting new lending from the Bretton Woods institutions, bearing in mind the expanded space available from debt relief for diversifying sources of financing.
After all, the objectives of debt relief are not only about increasing revenue flows to developing countries but also freeing countries from the economic and political coercion of debt, including redressing the asymmetrical relationship between debtor and creditor nations and debtor nations and international financial institutions. This recent debt cancellation may afford developing countries the opportunity to break out of the cycle of debt and conditionality and to engender genuine ‘country ownership’ of economic policies.
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The debt-trade connection in debt management initiatives. The need for a change in paradigm
Source: CHOIKE
The current international community efforts to support development and poverty reduction in developing countries are based on the notion that the participation of these countries in the international economic system is deeply affected by a series of asymmetries and imbalances. Debt and trade policies are perceived to be a crucial part of this complex of policies. However, the close interdependence that exists between the asymmetries in the trade system and the chronic nature of the over indebtedness problem faced by developing countries oftentimes goes missing in policy initiatives.
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