Tag: SovereignDebt

The first web application as part of Sovereign Vibe’s DataHub disaggregates the World Bank’s International Debt Statistics’ outstanding debt stock data for 68 low-income countries by creditors type: multilateral, bilateral, and private. Further decompositions are provided for the concessional and non-concessional components of multilateral and bilateral lending, and also for private credit by bondholders, banks, and other private lenders.

This first update to the “External Sovereign Debt: DSSI Countries” dashboard adds some helpful new features for users seeking to quickly view and analyze external public and publicly-guaranteed debt stock data. To begin with, the updated app now covers data extending back to 1970, the earliest year available in the WB database. The pilot version only extended coverage back to 2000, given the heavier data burden and the uncertainties around this initial attempt.

Secondly, this new version of the dashboard allows users to view the IDS debt stock data in US dollars, as previously, but now also includes an option to view the readings as a percentage of GDP.

Third, a new category has been created to aggregate all borrowing countries. When opening the application, the “Sovereign borrower(s)” category defaults to “All DSSI,” while the “Creditor(s)” menu defaults to “World” so that users can get a high-level view of all lending (i.e. from the entire world) for all these countries (i.e. all DSSI) at once. This view is presented in the previous post, “Cure worse than the disease,” but was previously unavailable through the dashboard.

Finally, the update enables users to select multiple creditors when viewing a country’s external debt stock. Over two hundred creditor locations and types are specified in the creditor menu, so, for example, a user could choose to look at how much China, France, bondholders, and the World Bank-IBRD have lent to Zambia up until the latest data reading.

Further updates to this dashboard could include allowing users to select multiple borrowers at once. While in practice providing this is currently possible for viewing the debt stock data in US dollars, some back-end work is needed to make aggregating borrowers usable in percentage of GDP. Next steps will include:

• Enabling users to select multiple borrowers at once
• Expanding coverage to the broader emerging markets universe
• Moving beyond external debt stocks and towards associated external sovereign debt flows
• Progressing from descriptive data towards analytical outputs

What are your thoughts on this basic dashboard? How do you think it could be improved, and what features would you like to see? Feel free to submit comments in the section below or via the website’s Contact page.

All suggestions for avenues of further research are welcome as Sovereign Vibe progresses from its current pilot phase towards deeper analysis of challenges facing the sovereign debt landscape and the emerging markets complex.

A high-level snapshot of the structure of outstanding external sovereign debt burdens for low-income countries and reflections on the G20’s pandemic-era DSSI policy and its successor, the Common Framework for Debt Treatments beyond the DSSI.

LIC debt burdens

During last month’s IMF-World Bank Spring Meetings, I listened to a discussion on debt crisis resolution between civil society activists and IMF staff. The vastly different frames of reference, language, and motivations on low-income country (LIC) debt playing out were captivating. It is precisely this clash of worlds that the sovereign debt space needs more of as stakeholders search for the best policies to foster inclusive growth and eradicate poverty.

Civil society organizations (CSOs) have a long-standing and well-known position on LIC external sovereign debt: in a nutshell, just cancel it. Indeed, rising external debt burdens in LICs in recent years have fueled more calls for debt forgiveness. Looking at the DSSI-eligible LICs, the rapid increase in external sovereign debt in the 2010s does give pause for concern. While the overall external public and publicly-guaranteed (PPG) debt load hovered around $200 billion throughout the 1990s and 2000s, it surpassed the $600 billion mark in 2021.

Contrast the CSO perspective with IMF staff assertions that external sovereign debt strains in LICs are less severe today than in the past. Needless to say, the CSO representatives were essentially unanimous in taking issue with this position, labeling it as provocative. IMF staff presented a chart resembling the one below, highlighting how external public debt-to-GDP was much heavier previously. In fact, the most acute strains occurred in the mid-1990s. These declined until the late 2000s, partly thanks to the Heavily-Indebted Poor Countries initiative (HIPC) from 1996 and the Multilateral Debt Relief Initiative (MDRI) from 2005.

While today’s external PPG debt ratios are less alarming, the growth of domestic capital markets in many LICs suggests that overall (i.e. domestic plus external) sovereign debt-to-GDP could be too high. Moreover, LIC sovereigns have borrowed more on non-concessional terms over the past decade, pointing to greater interest payment pressures.

The new data above will augment the DSSI dashboard in the Sovereign Vibe DataHub, where users can filter data by borrower and creditor.