With a growing mountain of global debt remaining at the heart of a highly fragile worldwide economy, experts are meeting in Geneva at the 10th UNCTAD Debt Management Conference on 23–25 November in a context of heightened alerts about threats to future debt sustainability in many emerging and developing economies. Global debt reached an astounding $199 trillion in 2014, up from $21 trillion in 1984.
The 10th UNCTAD Debt Management Conference will be addressed by President Michael Higgins of the Republic of Ireland and Luis Arce Catacora, Minister of the Economy and Public Finance of the Plurinational State of Bolivia, after an opening statement is given by UNCTAD Secretary-General Mukhisa Kituyi.
Attracting over 350 participants, including senior national and international policymakers, debt managers and experts from around the world, the conference provides a regular forum for sharing experiences and exchanging views between governments, international organizations, academia, the private sector, and civil society on current issues in public finance, debt management and debt crisis prevention.
While external sovereign debt indicators improved in many poor countries during the 2000s, gradually rising external debt levels will be more difficult to service in a world of falling commodity prices, rising interest rates, currency depreciations and a slowdown in the growth of global gross domestic product.
Of particular concern are heavily indebted companies in emerging markets, with corporate debt in poor countries estimated to have reached more than $18 trillion dollars, of which around $2 trillion are in foreign currencies. The risk of renewed sovereign debt crises is therefore real: financial crises originating in the private sector usually result in public over-indebtedness and a prolonged period of economic and social distress. Estimates vary but a recent International Monetary Fund paper found that such a crisis knocks 5 to 10 percentage points of current growth figures and that after eight years output is still lower (than country trend) by some 10 per cent.
Key issues to be considered by this year's conference participants will consequently include the nature of imminent threats to debt sustainability in emerging and developing economies and the ways in which well-informed and competent debt management, using relevant policy tools, can help prevent debt crises.
The first day of the conference is dedicated to in-depth analyses of global challenges to developing country debt sustainability. As the international community embarks on the new Development Agenda 2030, the historic finance requirements for the achievement of the Sustainable Development Goals provide an urgent and essential context for this discussion.
Panellists will debate the role of developing country debt in relation to other financing options for development against the backdrop of challenges arising from the instability of global financial markets, international commodity markets and changing policy regimes in advanced economies. They will also address increasing concerns about the continued absence of an effective and comprehensive mechanism for dealing with sovereign debt crises, when these occur, drawing on UNCTAD's work on new international bankruptcy rules and improved contractual approaches to debt refinancing.
On its second day, conference participants will consider new policy tools and approaches to an improved management of risk for effective debt strategies: What lessons can be learned from recent debt crises? How can contingent liabilities, such as those arising from exogenous economic shocks, natural disasters and climate change be managed?
Improving the ability of people, governments and international organizations to understand and respond to today's increasingly complex day-to-day management of debt will be the focus of discussions on the final day of the event.