Debt Relief Research Articles

2024 Update of Resource Adequacy of the Poverty Reduction and Growth Trust and the Debt Relief Trusts

2024 Update of Resource Adequacy of the Poverty Reduction and Growth Trust and the Debt Relief Trusts

Debt relief for households in developing economies

Abstract Households in developing economies have greater access to formal credit today than at any point in history, owing to the global expansion of microfinance and recent innovations in consumer finance, such as digital lending. While this has improved the ability to smooth consumption and invest in productive activities, it has also raised concerns about over-indebtedness. Against this background, this article reviews and extends the literature on debt relief for households in developing countries. We begin by laying out a simple stylized model that illustrates the costs and benefits of debt relief and use the model to guide our review of the evidence on various relief policies, such as debt forbearance, debt forgiveness, and personal bankruptcy. We additionally present survey evidence from a population of microfinance and bank borrowers with recent exposure to debt relief. The results highlight that an important channel through which discretionary debt relief policies, which are common in developing countries, affect credit market outcomes is their impact on borrower expectations. The development of legal bankruptcy institutions that offer a rules-based avenue to discharge unsustainable debts can reduce such distortions and alleviate the credit market inefficiencies that have often accompanied debt relief initiatives in developing economies.

The Impact of High Government Debt on Economic Development in Somalia

This study focuses on the impact of high government debt on economic development in Somalia. The specific objectives of the study encompass: to examine the impact of high government debt on Somalia's economic development, to explore the strategies that can be used to mitigate the negative impact of high government debt on economic development in Somalia and to evaluate the role of international financial institutions in managing high government in Somalia. This study employed descriptive research design and quantitative research method to investigate the impact of heavily-indebted on rebuilding economic development in Somalia. The study employed purposive sampling technique to select the participants of the study. The sample size of the study was 80 participants. To collect data from the respondents which they entail: Government officials, Economic analysts, representatives from financial institutions, Business owners and entrepreneurs, representatives from Non-governmental organizations (NGOs) and Academics (researchers and scholars). The study adopted close-ended questionnaire instrument data collected from the respondents of the study was entered, coded, sorted, organized and analyzed using Statistical Package Software Science (SPSS) version 28. The key findings of the study on the impacts of high government debt on Somalia's economic development entail: limited access to credit, increased debt servicing costs, inflation and currency depreciation, reduced investor confidence, limited fiscal space, vulnerability to external shocks and social unrest. The strategies the can be used to mitigate the negative impact of high government debt on economic development in Somalia include: promotion of financial literacy, strengthening regulatory framework, encouragement of diversification of the economy, Improving infrastructure and access to financial services, implementation of debt management strategies, fostering a conducive business environment and seeking external assistance and debt relief. And the role of international financial institutions in managing high government debt in Somalia entail: providing financial assistance, negotiating debt relief, offering technical expertise and supporting capacity-building. The study recommended that the Federal Government of Somalia should improve fiscal management and should work with international financial institutions and creditor countries to negotiate debt relief and restructuring agreements to reduce the burden of debt payments and boost economic development.

Origin, Debates and Recommendations: A Critical Review of Biden’s Student Debt Relief Plan

Origin, Debates and Recommendations: A Critical Review of Biden’s Student Debt Relief Plan

Implementing the debt-for-nature swaps for marine protected areas: case studies from Seychelles and Belize

As a financing method providing financial support for environmental protection, debt-for-nature swaps (DFNS) have been implemented for nearly forty years. DFNS have covered marine protected areas (MPAs) in four countries since 2015. Although extensive literature discusses the various issues surrounding DFNS, only some researchers have connected the topics of DFNS and MPAs to evaluate the performance of implementing DFNS for financing MPAs. This paper contributes to filling this gap by analyzing the performance of the DFNS for financing MPAs from economic, legal, and environmental aspects by case studies from Seychelles and Belize. It aims to find an answer to the research question of whether the implementation of DFNS is a viable option for financing MPAs by exploring the current performance and discussing the future development of implementing the DFNS for MPAs. The DFNS has played a positive role in establishing MPAs in Seychelles and Belize by providing stable financial support for MPAs and improving the debt sustainability of debtor countries to some extent. However, there are various barriers from a legal perspective in reaching a swap agreement, ensuring the effective implementation of the agreement, and improving the transparency construction. With the trend of increasing scale and amount of debt relief and funding, the DFNS is expected to play an important role in promoting the establishment of MPAs, realizing the economic benefits, and having a satisfactory performance by legal measures. It concludes that with the transparency construction of information disclosure, special legislation on DFNS, an appropriate scale of debt for conversion determined by considering the debt sustainability, an adaptation to the innovation of the contractual approach of sovereign debt restructuring, and complementary assistance from different levels, the implementation of DFNS can be a viable option for financing MPAs.

Ghana’s education and labour unions join civil society organisations to take on the IMF

ABSTRACT This article will explain how a series of educator strikes in 2022 in Ghana led to increased awareness of and calls for tax justice and debt relief from a growing movement of public sector workers and civil society organisations. We chart how the issues and demands of teacher organisations and other public sector workers shifted and increased over time, bringing in a new public imaginary to critique IMF driven austerity policies, build and link to global campaigns around debt relief, and signal new possibilities for generating more stable domestic public sector tax revenues. We examine the evolving strategies of growing educator strikes and show how unions are joining together with other civil society and advocacy groups to challenge fiscal austerity and government policies that affect not only their schools and classrooms but their lives and livelihoods. This case describing what Ghanaian teacher unions are doing to organise members to learn about and challenge austerity policies highlights the importance of public sector workers’ knowledge, understanding and engaging governmental macro-economic policies and offering alternative solutions.

Зовнішній державний борг україни на сучасному етапі: дорожня карта управління

The article examines the issue of improving the road map for the management of external public debt in wartime. Managing foreign public debt during wartime requires a comprehensive and strategic road map to address such circumstances’ unique challenges and risks. We offer a road map for managing external public debt in wartime, which considers the international debt relief initiatives analyzed in the post-war reconstruction of Europe. This roadmap provides a comprehensive approach to managing Ukraine’s external debt in wartime conditions and provides a framework for decision-making and adaptation to changes in the economic environment. It is aimed at preserving financial stability and ensuring economic stability in the conditions of military conflict. International debt relief initiatives in the post-war recovery of Europe are singled out, which can serve as an example for reducing the debt burden in Ukraine. The only way to ensure external debt security in the war and post-war period in Ukraine is to increase the economic growth rate and carry out reforms within the framework of the implementation of the Recovery Plan of Ukraine, which would increase the credit rating and reliability of the state. Ukraine’s participation in international cooperation is vital in managing external public debt and supporting economic development goals. For Ukraine, the fundamental way to solve the public debt problem will be to achieve stable and adequate economic growth. This will contribute to an automatic reduction of the debt-to-GDP ratio and an increase in tax revenues to the state budget without the need for excessive burden on businesses and individuals. The country’s debt security risks are identified and characterized. Keywords: debt, external public debt, road map, management, state.

Somalia's New Horizon: Joining the East African Community (EAC)

Somalia's recent participation in the EAC brings forth transformative opportunities and challenges across various sectors. This report delves into EAC integration, focusing on Somalia's opportunities and challenges, along with policy implications. It emphasizes the importance of comprehending Somalia's dynamic integration into the EAC for informed decision-making and strategic planning. As a member of the EAC Customs Union, Somalia gains access to a larger market, stimulating economic growth and fostering cross-border collaborations. The removal of trade barriers and participation in collaborative ventures offer resilience and connectivity to the global economy. The EAC Common Market reinforces fairness, equity, and cooperation, ensuring Somalia's equal treatment, transparency, and active engagement. Participation in the EAC Monetary Union addresses economic challenges, including dollarization and counterfeit currencies, and will promote economic stability. Somalia's involvement in the Political Federation provides support for lasting peace and recovery from years of conflict. Despite these advantages, challenges arise, including aligning regulations, adapting to increased competition, and navigating the complexities of regional cooperation. The economic landscape of Somalia is rapidly evolving, with notable achievements such as the UN Security Council's decision to end the arms embargo after three decades. Moreover, the International Monetary Fund (IMF) recognizes Somalia's strong implementation of wide-ranging reforms, strengthening key economic and financial policy institutions. This progress positions Somalia for potential debt relief at the Heavily Indebted Poor Countries (HIPC) Completion Point in December 2023. These milestones underscore Somalia's commitment to economic development, international trade, and the defeat of terrorism. The Political Federation in EAC brings both opportunities and challenges, requiring Somalia to balance national priorities with regional integration efforts, harmonize governance practices, and ensure political stability

Socioecological topologies of student debt in the United States

Student debt burdens are second only to mortgages in the United States’ debt portfolio. With nearly 43 million people repaying trillions of dollars of student debt, it is no surprise that calls for student debt cancellation have grown amid the COVID-19 pandemic, which has only exacerbated already existing economic crises in the US. And yet, meaningful action to address student debt has largely been absent from recent legislation meant to help Americans overcome the residual impacts, including the financial burdens, of the COVID-19 pandemic. Here, we argue the absence of student debt relief is consonant with what we articulate as the topologies of student debt in the US, which we use to contextualize the student debt crisis. We provide two case studies—on the relationship between environmental legislation and student debt, and on the uneven ruralities of student debt—that give insight into the socioecological dimensions of student debt's topologies. We end this article by inviting others to join us as we develop more geographical evidence to support ongoing activism for student debt cancellation.

Criticism of Multilateral Development Banks Operating Reflections During Covid-19 Pandemic - From the Perspective of the Sovereign Debt

The problem of sovereign debt crises has a long history at the international level, especially in the face of global crises such as the global financial crisis of '08 and the recent COVID-19 pandemic. In the face of the negative social impacts of these emergencies, the state apparatus of each country needs help with relying on domestic channels such as tax revenues and investment returns to maintain efficient operations. It would, therefore, finance other countries in non-domestic currencies, and such a solution would exacerbate countries' sovereign debt crises. Countries have done well in restructuring their sovereign debt in response to sovereign debt crises, especially in Europe and Africa. The International Development Association provided some debt relief to those countries with fragile economies, but the crisis is still present today. In order to expand sustainable financing and maintain economic stability, new multilateral development banks have been established in some regions. These MDBs have been restructuring since the Great Depression, and their lending policies have indeed eased countries' sovereign debt crises to some extent. However, their financing rules have also influenced other countries' policies, making them widely criticised internationally. In the context of COVID-19, both the strengths and weaknesses of MDBs are exposed, so they still have a long way to go before they can become international institutions that can pay attention to disadvantaged countries and help them develop.

The Trojan Horse of sovereign debt

ABSTRACT This article analytically attends to the question: ‘what gets activated through’ the regime of sovereign debt today. Beyond the headlines of loans, debt, debt relief, restructuring, default and other terms of the trade, what is it that gets activated through creditor–debtor relations in the Global South? Four answers are set out: extortion and subordination in the guise of official credit; legal construction of an apolitical economy; austerity as a technique of social and political control; and lastly, as part of a quartet of forevering reign by debt, reversing social rights expectations and permanently embedding poverty. The explanation for the mystery of an unfathomable economic logic is that there must be a different scheme at work.

Beyond Debt Relief: Navigating Somalia's Path to Sustainable Economic Resilience and Growth in the Post-HIPC Era

Beyond Debt Relief: Navigating Somalia's Path to Sustainable Economic Resilience and Growth in the Post-HIPC Era

Political Consequences of (Consumer) Debt Relief

Political Consequences of (Consumer) Debt Relief

Intergenerational Effects of Debt Relief: Evidence from Bankruptcy Protection

Intergenerational Effects of Debt Relief: Evidence from Bankruptcy Protection

The Long-Run Effects of Individual Debt Relief

The Long-Run Effects of Individual Debt Relief

<span>Comment in Response to the U.S. Department of Education's Notice of Proposed Rulemaking on Student Debt Relief</span>

<span>Comment in Response to the U.S. Department of Education's Notice of Proposed Rulemaking on Student Debt Relief</span>

The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments

The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments

The Heterogeneous Effects of Household Debt Relief

The Heterogeneous Effects of Household Debt Relief

The Long-Run Effects of Individual Debt Relief

The Long-Run Effects of Individual Debt Relief

From Lords of Corruption to Leeches of Theo-mafia: The Suffering of the People in Somalia

This paper presents comprehensive strategies for combating corruption and countering terrorism in the context of Somalia's aspiration for peace, democracy, and prosperity. Acknowledging the interconnectedness of these challenges, the strategies offer a multi-dimensional approach tailored to Somalia's unique circumstances. 
 The anti-corruption strategy focuses on strengthening institutions, promoting transparency, and instigating a cultural shift away from corrupt practices. It also underscores responsible lending and the pursuit of total debt relief to enable economically productive projects.
 The counter-terrorism strategy adopts a holistic approach, combining military actions with economic incentives, ideological reorientation, and rehabilitation. It emphasizes community-centered collaborations, religious engagement, and reintegration programs for former combatants. These strategies are designed to guide policymakers, academia, and stakeholders in shaping Somalia's trajectory towards a more just, secure, and prosperous future.