Debt Management for Development
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Debt Management for Development

Protection of the Poor and the Millennium Development Goals

Kunibert Raffer

This book exposes intolerable global double standards in the treatment of debtors and argues that fairness, economic efficiency and principles common to all civilized legal systems, must and can be applied to so-called ‘developing countries’, or Southern sovereign debtors.
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Annex on Data: Caveats on Debt Statistics and Indicators

Kunibert Raffer


When discussing debt issues, one should always keep in mind that published data and widely used indicators may be misleading, simply wrong or unreliable, wrongly interpreted, or – if worst comes to worst – be abused to back untenable arguments. Before interpreting data or drawing practical (political) conclusions one should therefore examine debt statistics critically to see what precisely can be deduced from them, what they tell us and whether they are fully reliable. One should always heed the IBRD’s warning, expressed, for instance, in its World Debt Tables 1992–93 (vol. 2, p. v) that conclusions drawn from debt indicators will not be valid unless accompanied by careful economic evaluation. Various data problems, such as the use of specific discount rates, their use when it comes to determining sustainability, differences between secondary market prices (economic values) and face values of loans, differences between cost estimates for the MDGs or data reliability have cropped up earlier. The official euphoria of the 1990s about Latin America having put the debt crisis behind was backed by pointing out that conventional debt indicators, such as the debt service ratio (DSR), had returned to pre-1982 levels. The IBRD’s World Debt Tables 1992–93 (vol. 1, p. 59) declared, under the subheading ‘Beyond the crisis’: ‘Although several middle-income countries are still heavily indebted, the debt crisis affecting middle-income countries worldwide is past. While the legacy of the crisis will cast a shadow on their prospects, their debt-to-export ratios, which have declined substantially since 1986, are now below...

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