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Addressing Debt Vulnerabilities in Small States: The Potential Role of New Financing Instruments

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dc.contributor.authorHaque, Tobias
dc.contributor.authorPartow, Zeinab
dc.contributor.authorVarma, Sona
dc.contributor.authorOliveira, Luiz Edgard
dc.date.accessioned2016-04-05T19:47:42Z
dc.date.available2016-04-05T19:47:42Z
dc.date.issued2016-03
dc.description.abstractThe papers in this series aim to provide a vehicle for publishing preliminary results on Macroeconomics and Fiscal Management (MFM) topics to encourage discussion and debate. This paper explores two new financing mechanisms that multilateral and bilateral development agencies could consider deploying to address problems of debt sustainability in small states. In this paper the authors provide an initial assessment of these proposals, informed by analysis of small state indebtedness and recent debt dynamics. Proposed financing instruments are predicated on assumptions that small states face high levels of indebtedness, and that reducing debt levels while increasing climate resilience could sustainably reduce such vulnerabilities. The authors find that levels of indebtedness vary widely across small states. Analysis of small state debt dynamics shows that small state debt accumulation has been driven by large primary and current account deficits and slow economic growth. Debt reduction from new mechanisms can only be expected to be sustainable, therefore, if countries simultaneously address the macroeconomic imbalances driving debt accumulation. The authors demonstrate that, while exposure to natural disasters is likely to have exacerbated economic management challenges in some small states, such exposures are unlikely to be the only important cause of indebtedness. The authors conclude that proposed new financing instruments can potentially help reduce small state debt burdens and gain fiscal space for climate adaptation but will not present a sustainable solution to problems of small state debt risks unless they involve macroeconomic and structural reforms to address the underlying imbalances driving rapid debt accumulation.en
dc.identifierhttp://documents.worldbank.org/curated/en/2016/03/26067070/addressing-debt-vulnerabilities-small-states-potential-role-new-financing-instruments
dc.identifier.doi10.1596/24009
dc.identifier.urihttps://hdl.handle.net/10986/24009
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectDEBT SOURCE
dc.subjectPUBLIC EXTERNAL DEBT
dc.subjectCREDIT MARKETS
dc.subjectPLEDGES
dc.subjectDEFICIT
dc.subjectHOLDING
dc.subjectDEBT ACCUMULATION
dc.subjectCAPITAL MARKETS
dc.subjectDEBT SUSTAINABILITY ANALYSES
dc.subjectINTERNATIONAL CAPITAL
dc.subjectREAL INTEREST RATES
dc.subjectPARTICULAR DEBT
dc.subjectFISCAL DEFICITS
dc.subjectINTEREST
dc.subjectDEBTORS
dc.subjectDEBT STOCK
dc.subjectINTEREST RATE
dc.subjectPRIVATE CREDIT
dc.subjectEXCHANGE
dc.subjectLOCAL GOVERNMENTS
dc.subjectLIQUIDITY
dc.subjectDEBT MANAGEMENT
dc.subjectDEBT STATISTICS
dc.subjectDEVELOPING COUNTRIES
dc.subjectGOVERNMENT BORROWING
dc.subjectREPAYMENTS
dc.subjectREAL INTEREST
dc.subjectTOTAL DEBT
dc.subjectINTERNATIONAL CAPITAL MARKETS
dc.subjectEXPORTERS
dc.subjectREVENUES
dc.subjectPORTFOLIO
dc.subjectLIQUIDITY RISK
dc.subjectDOMESTIC DEBT MARKETS
dc.subjectDEBT PORTFOLIOS
dc.subjectDISCOUNT
dc.subjectMULTILATERAL DEBT RELIEF
dc.subjectMARKET ACCESS
dc.subjectCURRENT ACCOUNT SURPLUSES
dc.subjectINTERNATIONAL BANK
dc.subjectDEBT BURDENS
dc.subjectCREDITORS
dc.subjectDEBT BURDEN
dc.subjectCREDITOR
dc.subjectCASH FLOWS
dc.subjectINSTRUMENTS
dc.subjectDEBT LEVEL
dc.subjectOUTSTANDING DEBT STOCKS
dc.subjectBUDGET
dc.subjectINITIAL DEBT
dc.subjectCOMMERCIAL CREDITORS
dc.subjectINDEBTEDNESS
dc.subjectDOMESTIC CURRENCY
dc.subjectNATURAL DISASTER
dc.subjectDISBURSEMENT
dc.subjectGRACE PERIODS
dc.subjectACCESS TO FINANCING
dc.subjectPORTFOLIOS
dc.subjectCURRENT ACCOUNT
dc.subjectDEBTS
dc.subjectMACROECONOMIC RISKS
dc.subjectINTEREST RATES
dc.subjectBANK DEBT
dc.subjectTOTAL EXTERNAL DEBT
dc.subjectNATURAL DISASTERS
dc.subjectEXTERNAL INDEBTEDNESS
dc.subjectMULTILATERAL CREDITORS
dc.subjectMARKETS
dc.subjectDEBT
dc.subjectRETURN
dc.subjectDEFICITS
dc.subjectDEBT-RELIEF
dc.subjectPUBLIC DEBT MANAGEMENT
dc.subjectINTERNATIONAL DEBT
dc.subjectDEBT SERVICING NEEDS
dc.subjectMULTILATERAL DEBT
dc.subjectDOMESTIC DEBT
dc.subjectREAL INTEREST RATE
dc.subjectAMORTIZATION PAYMENTS
dc.subjectDEBT SERVICE
dc.subjectTRUST FUNDS
dc.subjectFINANCE
dc.subjectCURRENT ACCOUNT DEFICITS
dc.subjectEXPENDITURE
dc.subjectDEBT LEVELS
dc.subjectTRANSACTION
dc.subjectDEBT SUSTAINABILITY ANALYSIS
dc.subjectINTEREST PAYMENTS
dc.subjectEXTERNAL DEBT STOCK
dc.subjectDEBT REDUCTION
dc.subjectEXTERNAL DEBT SERVICE
dc.subjectCOUNTRY DEBT
dc.subjectDOMESTIC MARKETS
dc.subjectLEGAL OBLIGATION
dc.subjectFUTURE
dc.subjectDEBT CRISES
dc.subjectDEBT THRESHOLD
dc.subjectCOMMERCIAL TERMS
dc.subjectRETURNS
dc.subjectCOMMERCIAL DEBT
dc.subjectDEBT RELIEF INITIATIVES
dc.subjectBUDGETS
dc.subjectBAILOUTS
dc.subjectREPAYMENT
dc.subjectDEBT EXCHANGES
dc.subjectCURRENT ACCOUNT DEFICIT
dc.subjectINSTITUTIONAL CAPACITY
dc.subjectDIVERSIFIED PORTFOLIOS
dc.subjectFACE VALUE
dc.subjectREAL EXCHANGE RATE
dc.subjectDEBT STOCKS
dc.subjectMARKET
dc.subjectDEBT RATIOS
dc.subjectNET PRESENT VALUE OF DEBT
dc.subjectPUBLIC DEBT
dc.subjectSOLVENCY
dc.subjectPRIVATE DEBT
dc.subjectMACROECONOMIC VARIABLES
dc.subjectAVERAGE DEBT
dc.subjectGOVERNMENT DEBT
dc.subjectDEBT MARKETS
dc.subjectSTOCKS
dc.subjectDEBT SERVICE REDUCTION
dc.subjectINVESTMENT
dc.subjectDEBT SERVICE OBLIGATIONS
dc.subjectOUTSTANDING DEBT
dc.subjectBILATERAL DONORS
dc.subjectSHARE
dc.subjectCOMPOSITION OF DEBT
dc.subjectDEBT RESTRUCTURING
dc.subjectDEBT OBLIGATIONS
dc.subjectEXTERNAL PUBLIC DEBT
dc.subjectDEBT SERVICE PAYMENTS
dc.subjectINSTITUTIONAL DEVELOPMENT
dc.subjectDEBT REPAYMENTS
dc.subjectEXTERNAL SHOCKS
dc.subjectEXTERNAL DEBT
dc.subjectINVESTMENTS
dc.subjectTRUST FUND
dc.subjectPUBLIC SECTOR DEBT
dc.subjectDEBT THRESHOLDS
dc.subjectDEBT FORGIVENESS
dc.subjectSWAPS
dc.subjectLEVEL OF DEBT
dc.subjectAMOUNT OF DEBT
dc.subjectEXTERNAL FINANCING
dc.subjectMATURITIES
dc.subjectDEBT SWAP
dc.subjectEXCHANGE RATE
dc.subjectDEBT SERVICING
dc.subjectDEBT SUSTAINABILITY
dc.subjectPUBLIC SPENDING
dc.subjectDEBT CONVERSION
dc.subjectBILATERAL CREDITORS
dc.subjectLIABILITIES
dc.subjectMARKET RETURNS
dc.subjectDEBT REDUCTIONS
dc.subjectEXTERNAL LIQUIDITY
dc.subjectDEBT DYNAMICS
dc.subjectCASH FLOW
dc.subjectDEVELOPMENT BANK
dc.subjectSWAP
dc.subjectDEBT RELIEF
dc.subjectBILATERAL DONOR
dc.subjectINVESTING
dc.titleAddressing Debt Vulnerabilities in Small Statesen
dc.title.subtitleThe Potential Role of New Financing Instrumentsen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.date.disclosure2016-03-14
okr.doctypePublications & Research
okr.doctypePublications & Research::Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/2016/03/26067070/addressing-debt-vulnerabilities-small-states-potential-role-new-financing-instruments
okr.identifier.doi10.1596/24009
okr.identifier.externaldocumentum090224b0841fb4e8_1_0
okr.identifier.internaldocumentum26067070
okr.identifier.report103940
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2016/03/14/090224b0841fb4e8/1_0/Rendered/PDF/Addressing0deb0inancing0instruments.pdfen
okr.region.geographicalCaribbean
okr.region.geographicalOceania
okr.region.geographicalSub-Saharan Africa
okr.topicFinance and Financial Sector Development::Banks & Banking Reform
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicFinance and Financial Sector Development::Bankruptcy and Resolution of Financial Distress
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicEnvironment::Adaptation to Climate Change
okr.unitMacro & Fiscal Mgmt - GP (GMFDR)
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