Financial crises of the 1990's highlighted the need for effective public debt management (PDM) to help reduce financial vulnerabilities. Experience suggests that many countries have made progress in strengthening their PDM frameworks and reducing debt-related vulnerabilities. Nonetheless, challenges remain in establishing an effective governance framework and in building capacity. Many others – especially low-income countries (LICs) - continue to face a range of policy, institutional and operational challenges. The international community has committed considerable resources to LICs through official development assistance and the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). Yet, their risks of debt distress remain high due to their economic fragility, the possibility that their newly created borrowing space will be used for unsustainable commercial borrowing, and their generally weak capacity in debt management.
In this context, the Bank and the IMF have developed sound PDM practices for debt management strategy and operations. To meet the needs of LICs, the World Bank’s Economic Policy and Debt Department has developed a Debt Management Performance Assessment (DeMPA) initiative. DeMPA is a methodology for assessing debt management performance through a comprehensive set of indicators spanning the full range of government debt management (DeM) functions. Based on the PEFA methodology for public financial management, DeMPA reflects sound practices in government debt management and represents an internationally recognized and comprehensive methodology.
Debt Management: Services and Products
The World Bank Group offers services and products, provides global expertise and supports countries in strengthening debt management capacity, monitoring and analyzing financial risks in debt structures at two levels; first, through advisory work in collaboration with individual countries on demand, and second, through knowledge dissemination, training, outreach and research.
Medium-Term Debt Management Strategies (MTDS)
Recent Events: Debt Management Stakeholder's Conference: March 5-6, 2008, Oslo, Norway.
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