This paper examines the causes, processes, and outcomes of Barbados’ 2018–19 sovereign debt restructuring—its first ever. The restructuring was comprehensive, featuring several rarely used approaches, including the restructuring of treasury bills, and the use of a retrofitted collective action mechanism. The debt restructuring has helped to set Barbados’ public debt on a clear downward trajectory. A sustained reform effort, maintaining high primary surpluses and ambitious structural reforms, will be needed to gradually reduce public debt from about 160 percent of GDP before the restructuring to the country’s 60 percent debt-to-GDP target.
The book sheds light on the perhaps most important legal conundrum in the context of sovereign debt restructuring: the holdout creditor problem. Absent an international bankruptcy regime for sovereigns, holdout creditors may delay or even thwart the efficient resolution of sovereign debt crises by leveraging contractual provisions and, in an increasing number of cases, by seeking to enforce a debt claim against the sovereign in courts or international tribunals. Following an introduction to sovereign debt and its restructuring, the book provides the first comprehensive analysis of the holdout creditor problem in the context of the two largest sovereign debt restructuring operations in history: the Argentine restructurings of 2005 and 2010 and the 2012 Greek private sector involvement. By reviewing numerous lawsuits and arbitral proceedings initiated against Argentina and Greece across a dozen different jurisdictions, it distils the organizing principles for ongoing and future cases of sovereign debt restructuring and litigation. It highlights the different approaches judges and arbitrators have adopted when dealing with holdout creditors, ranging from the denial of their contractual right to repayment on human rights grounds to leveraging the international financial infrastructure to coerce governments into meeting holdouts’ demands. To this end, it zooms in on the role the governing law plays in sovereign debt restructurings, revisits the contemporary view on sovereign immunity from suit and enforcement in the international debt context, and examines how creditor rights are balanced with the sovereign’s interest in achieving debt sustainability. Finally, it advances a new genealogy of holdouts, distinguishing between official and private sector holdouts and discussing how the proliferation of new types of uncooperative creditors may affect the sovereign debt architecture going forward. While the book is aimed at practitioners and scholars dealing with sovereign debt and its restructuring, it should also provide the general reader with the understanding of the key legal issues facing countries in debt distress. Moreover, by weaving economic, financial, and political considerations into its analysis of holdout creditor litigation and arbitration, the book also speaks to policymakers without a legal background engaged in the field of international finance and economics.
Sovereign domestic debt restructurings have become more common in recent years and touched upon a growing share of total public debt. This paper offers a simple framework for policymakers to think about the decision whether to restructure domestic sovereign debt as part of an effort to reduce overall public indebtedness. It also highlights a rather wide range of technical, legal, and operational issues a sovereign may face while restructuring domestic debt. As expected, factors such as debt reduction required to achieve sustainability, fiscal savings from a restructuring, and economic costs of a restructuring are key inputs into the decision making regarding a restructuring, but so are factors such as the composition of debt, financial stability costs, and crisis preparedness, all of which are discussed in the paper.
This multi-disciplinary publication focuses on the issue of African sovereign debt management and renegotiation/ restructuring, with a particular concentration on the countries that are members of the Southern Africa Development Community (SADC). It contains a series of essays that were initially presented in several workshops held at the height of the pandemic, in 2020. These essays seek to both understand the debt challenges facing these countries and to offer some policy-oriented suggestions on how they can more effectively address these. They include contributions by global and regional scholars who are seasoned experts and newer researchers and discuss the complexities on debt management and restructuring within the context of the global COVID-19 pandemic. In particular, this presented an opportunity for junior researchers from the region to contribute to international discussions on a topic in which the views of young Africans are not heard as often or as clearly as they should be, especially given the importance of the topic to Africa and its future. Further, this book is expected to stimulate debate among academics, activists, policy makers and practitioners on how SADC should manage its debt.
This paper undertakes a comprehensive review of the Fund’s sovereign arrears policies. Staff assesses that the Fund’s Lending into Arrears to Private Creditors (LIA) policy (established in 1989 and last reviewed in 2002) remains broadly appropriate, while recommending some improvements given the experience gained over the last 20 years. Staff also sees merit in codifying the existing practice guiding the Fund in preemptive debt restructurings into a Fund policy, together with an amendment focusing on debt transparency. Given limited experience with the application of the LIOA policy (established in 2015), staff does not propose any amendments but only one restatement confirming current practice. Given recent developments in the international creditor community, staff proposes refining the Fund’s arrears policies with respect to multilateral creditors. Finally, recent developments raise questions about the perimeter between official bilateral and private claims, with significant implications for the Fund’s arrears policies.
The Trade and Development Report 2023 analyses current economic trends and major policy issues of international concern and makes suggestions for addressing these issues at various levels. The report warns that the global economy is stalling, with growth slowing in most regions compared with last year and only a few countries bucking the trend. The global economy is at a crossroads, where divergent growth paths, widening inequalities, growing market concentration and mounting debt burdens cast shadows on the future. The prospect of meeting the Sustainable Development Goals (SDGs) by 2030 is fading as a combination of rising interest rates, weakening currencies and slowing export growth squeezes the fiscal space needed for governments to fight climate change and provide for their people. The report calls for a change in policy direction – including by leading central banks – and accompanying institutional reforms promised during the COVID-19 crisis to avert a lost decade. It urges global financial reforms, more pragmatic policies to tackle inflation, inequality and sovereign debt distress, and stronger oversight of key markets. The report proposes actions to get the global economy moving in the right direction by using a balanced policy mix of fiscal, monetary and supply-side measures to achieve financial stability, boost productive investment and create better jobs. Part I of the report launches on 4 October 2023 with part II expected in November.
This book deals with the complex and challenging relationship between economic policy and human rights. In the context of the COVID-19 pandemic crisis, the need to address the conceptual and methodological (dis)connects between these two areas is more pressing than ever. Inspired by the 2019 United Nations Guiding Principles on Human Rights Impact Assessments (HRIA) for Economic Reform Policies, this book brings together experts working on human rights and economic policy from a range of disciplinary perspectives, including economics, law, and development studies. The contributions reflect a huge body of professional experience in the academic, policy-making, advocacy, and practitioner fields. They cover issues including the politics of evidence in the context of HRIA, economic inequality, child rights impact assessment of economic reforms, economic policy and women’s human rights, tax regimes for multinational corporations and human rights, as well as the human rights impacts of the economic fall-out of the COVID-19 pandemic. The collection also includes the text of the Guiding Principles themselves. It constitutes a crucial volume for scholars, policymakers, advocates and others working on the burning topic of human rights and economic policy reform. The chapters in this book were originally published as a special issue of The International Journal of Human Rights.
What is the place of human rights law within global governance? How can we safeguard human rights in various sites of global governance? What is the role of the state, non-state actors, and global governance institutions in all this? Global Rights?: Human Rights in Complex Governance interrogates how human rights and global governance interact with various sub-fields of international and transnational regulation to answer these foundational questions. The volume offers a detailed exploration of the role of human rights in global governance contexts, such as the sovereign debt regime, global value chains, development assistance, international food governance, and the laws of war. Through an in-depth study of several global governance regimes based on diverse theoretical and methodological approaches, this volume challenges the mainstream discourse on the evolution of human rights law and its limits. As a result, issue areas that are rarely in conversation with each other--such as the World Bank's practices and the law on the use of force--are examined through a common analytical framework that is both rich and flexible enough to shed new light on individual areas of concern and simultaneously reflect on cross-cutting themes. Bringing human rights experts together with leading scholars in the law of international organizations, public finance, corporations, and use of force, Global Rights? thus serves as a contemporary reflection and set of arguments on how to study and productively think about human rights in complex governance settings.
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
