Loans – Kent Tribune Thu, 07 Oct 2021 01:00:19 +0000 en-US hourly 1 Loans – Kent Tribune 32 32 Many countries need debt relief Thu, 11 Mar 2021 06:07:50 +0000

WITH DEBTS looming and dollars scarce, Zambia has struggled in recent months with a difficult situation. She knew that not paying the bonds would be damaging. But paying only them, not having paid the others in full, could be worse. Other creditors “would blow my legs up,” the country’s finance minister said. Thus, on November 13, Zambia became the sixth government to default on its obligations this year, after Argentina, Belize, Ecuador, Lebanon and Suriname. Others might follow. Although financial markets have regained much of the calm they lost in March, many countries still have more debt than they can comfortably handle. Thirty-eight governments have a credit rating of “significant” or worse default risk, double the number at the end of 2009.

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The debts of poor countries would be less intimidating if they weren’t for such a tangle of competing debts. The poorest 73 owe nearly a fifth ($ 102 billion) of their external debt to private creditors, bondholders to banks, a similar amount to China, $ 76 billion to other governments and the rest to multilateral lenders like the World Bank (see article). And that is precisely what international institutions can count on. It is difficult to craft fair debt relief deals out of such a pot-au-feu. Three changes in particular would be helpful: a more concerted approach by public lenders, stricter legislation to curb troublesome private creditors, and greater use of flexible instruments that more closely align repayment with the borrower’s situation.

Any debt debacle pits the interests of borrowers against those of lenders, but also lenders against each other. A creditor can be lenient. But it allows others to take advantage of his generosity and receive full payment. So every creditor wants to be sure that the others are doing their part. In the case of Zambia, Chinese lenders (who have agreed to defer some payments) and private bondholders (who have not) blame each other for the stalemate.

To ensure that each of them does their fair share, most governments in rich countries jointly offer debt relief through the Paris Club, a group of government lenders. America has long urged China to join us. And at a summit on November 21-22, China will do the next best thing. With the rest of the G20 group of large economies, it will sign a “common framework” to alleviate the debts of the 73 poorest countries in the world, if they prove to be unbearable. The framework has a limited scope. It will only apply to countries that ask for help, assume full responsibility, submit to IMF-style political prescriptions and show that they cannot bear their debts. In other words, it will not bring rapid and unconditional debt relief to all poor countries, whatever their needs or demands. The framework requires all official creditors to do their part. It also obliges the borrowing country to seek similar assistance from private lenders.

The setting is a welcome step. The G20 should now consider some extensions. The same principles should also apply to other emerging markets, beyond the poorest 73. The framework favors reducing interest rates or deferring repayments over reducing the stock of debt. This bias should change. It generally reflects the accounting conventions of creditor countries rather than a sound economic rationale. Indeed, investment and growth respond more vigorously when debts are reduced, rather than payments that are lightened or lengthened. And if private creditors refuse to do their part and demand full payment in court, G20 governments should pass additional legislation to cap the gains vulture funds can derive from litigation. Such laws can look like awkward violations of creditors’ rights. But they can be justified if the prospects for a favorable legal settlement of a creditor depend on the debt relief ultimately granted by taxpayers.

Debt crises can stimulate innovation in financial instruments as well as in institutions. The Latin American debt crisis of the 1980s, for example, was not finally resolved until illiquid bank loans were turned into marketable “Brady” bonds, named after Nicholas Brady, then US Treasury Secretary. To guard against future crises, the IMF and its sister organizations could help promote new innovations in the types of debt a country can offer.

Uncertain times have, for example, sparked new interest in bonds that automatically pay less when commodity prices fall or natural disasters strike. Other instruments may pay extra when GDP growth exceeds a threshold. Some of these instruments may require an independent institution to help standardize terms and disputes relating to arbitrators. Another idea to be explored is that of “flexible bonds”, which would allow the borrower to lengthen their maturity at a pinch (and defer interest payments) in exchange for additional interest at the end of the term. extended life of the bond. Similar bonds already exist in corporate debt markets, which could make it easier for investors to accept and price a sovereign version. Mr. Brady’s smart idea revolutionized the developing country debt market. The time has come for another transformation.

This article appeared in the Leaders section of the print edition under the headline “A Better Way Not To Pay”

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UK to host World Climate and Development Summit this month Thu, 11 Mar 2021 06:07:50 +0000

The UK is due to host the World Climate and Development Summit later this month as part of the road to COP26 in Glasgow in November.

The countries most vulnerable to the impacts of climate change will be the focus of the Summit, as many developing countries face multiple threats from rising temperatures, economic shocks and COVID-19.

The Ministerial Conference on Climate and Development will bring together countries and partners to focus on how to work together on these issues and prevent them from escalating, including by mitigating the impacts of climate change, debt relief and access to finance.

A selection of the countries most affected by the impacts of climate change through Africa and Asia, as well as some small island developing states were invited to join the event, alongside representatives of the G7, international institutions and major donor countries.

The event, which will be hosted by the UK and co-chaired by COP26 President-designate Alok Sharma and Foreign Minister Dominic Raab, will be held virtually on March 31, 2021.

Mr Sharma said: “One of my top priorities as COP President is to champion global action for vulnerable countries on the front lines of climate change and the Ministerial Conference on Climate and Development is a key element of this approach.

Summit outcomes will help shape the agenda in other key international fora until COP26 and beyond.

Andrew Norton, Director of the International Institute for Environment and Development added: “The world’s poor are disproportionately affected by these problems, but are ready to take on this challenge. This UK government process is essential to bring together experts from all regions to co-design practical solutions with developing countries to bring about radical change in climate and development this year. “

If you liked this story, you can subscribe to our weekly email to Live Energy News – and if you want to know more about the journey to net zero by 2050, you can also sign up for the net zero future bulletin.

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G20 to discuss post-Covid world and support debt relief Thu, 11 Mar 2021 06:07:50 +0000

Leaders of the world’s 20 largest economies (G20) will debate this weekend on how to deal with the unprecedented Covid-19 pandemic that has caused a global recession and how to handle the recovery once the coronavirus has subsided. control.

Topping the list is the global procurement and distribution of vaccines, drugs and tests for low-income countries that cannot afford such expenses on their own. The European Union will urge the G20 on Saturday to invest $ 4.5 billion to help.

“The main theme will be to intensify global cooperation to fight the pandemic,” said a senior G20 official participating in the preparations for the two-day summit, chaired by Saudi Arabia and held virtually due to the pandemic.

In his opening remarks to G20 leaders, the 84-year-old Saudi ruler King Salman bin Abdulaziz stressed the need for equitable access to tools to fight Covid-19, including vaccines. “We must work to create the conditions for affordable and equitable access to these tools for all people. At the same time, we need to better prepare for any future pandemic, ”he told the group via video link.

To prepare for the future, the EU will propose a treaty on pandemics.

“An international treaty would help us to react more quickly and in a more coordinated way”, declared Sunday the president of the European leaders Charles Michel at the G20.

Debt relief

As the global economy recovers from the depths of the crisis earlier this year, momentum slows in countries where infection rates resurface, recovery is patchy and the pandemic is likely to leave deep scars, said the International Monetary Fund in a report for the G20 summit.

Poor and heavily indebted countries of the developing world are particularly vulnerable, which are “on the brink of financial ruin and escalating poverty, hunger and untold suffering,” the United Nations Secretary-General said on Friday. , Antonio Guterres.

To address this, the G20 will approve a plan to extend the moratorium on debt service for developing countries by six months until mid-2021, with the possibility of a further extension, according to a draft G20 press release. through Reuters.

The European members of the G20 are likely to demand more. “Further debt relief is needed,” Michel told reporters on Friday. Africa’s debt relief will be an important theme of Italy’s G20 presidency in 2021.

“Activate multilateralism”

European G20 countries will also seek new impetus for stalled reform of the World Trade Organization (WTO), hoping to capitalize on the upcoming change of US administration. “We must also continue to support the global economy and reopen our economies and our borders to facilitate the mobility of trade and people,” King Salman said.

Earlier on Saturday, Saudi Investment Minister Khalid al-Falih said this year’s crisis had highlighted the importance of multilateral organizations.

“The G20, its essence, activates multilateralism, and of course that has taken a step back in recent years,” Falih said.

Outgoing US President Donald Trump has favored bilateral trade agreements rather than going through international bodies. The change in leadership in this country also raises hopes for a more concerted effort at the G20 level to fight climate change.

Focus on climate change

Like the European Union, already half of the G20 members, including Japan, China, South Korea and South Africa, plan to become climate or at least carbon neutral by 2050 or soon after.

Under Trump, the United States withdrew from the Paris Agreement on climate change, but the decision is expected to be overturned by President-elect Joe Biden.

“We expect, of course, a new impetus from the new American administration on this issue, thanks to the declaration of the president-elect that the United States will join the Paris agreement again,” said the president of the European Commission. Ursula von der Leyen.

To help finance the fight against climate change, the EU will push for the G20 to agree on common global standards on what constitutes a “green” investment.

This would help attract the massive private investment needed as many investment funds are keen to invest in environmentally friendly projects, but there is no agreed way to select them. The EU is already working on such standards to put them in place by 2022.

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SBA extends life-saving debt relief to small businesses and others affected by COVID-19 – SatNews Thu, 11 Mar 2021 06:07:50 +0000

As the U.S. Small Business Administration continues to implement the Economic Assistance to Small Businesses, Nonprofit Organizations and Hard Affected Sites Act, promulgated by the president Asset December 27, 2020, SBA Administrator Jovita Carranza made the following statement with respect to Section 325:

Jovita Carranza

Small businesses are big businesses in America, and this administration will continue to extend a lifeline to small business owners during this critical time. Congress instructed the SBA to make debt relief payments (principal, interest, and fees) under Section 1112 of the CARES Act to assist borrowers in 7 (a), 504, and microcredit from the SBA; and now SBA is working quickly to implement the newly enacted assistance.

The new law expands the SBA’s debt relief power, allowing the administration to continue to mitigate the negative economic effects of COVID-19 for small businesses receiving SBA loans. As of April of last year, the SBA has made more than $ 7.1 billion in payments on 1,819,130 ​​loans on behalf of these borrowers. It is important to note that these companies were also initially able to access capital due to the federal guarantee of the SBA.. “

The SBA is in the process of determining how much additional debt relief assistance can be provided to SBA borrowers with the newly issued Congressional credits. Debt relief guidelines will soon be published on the ASB website.

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Africa needs debt relief to fight COVID-19 Thu, 11 Mar 2021 06:07:50 +0000

After a slow start, COVID-19 has spread increasingly rapidly across Africa, with more than 7,000 confirmed cases and 294 deaths in 45 countries and two territories as of April 7. Unless the continent urgently receives more aid, the virus will continue to make its deadly and ruthless path through it, with increasingly dire health and economic consequences. As an essential first step, we therefore call for immediate debt relief for African countries to create the fiscal space governments need to respond to the pandemic.

After all, the fight against COVID-19 is more difficult in Africa than in other parts of the world. Access to quality health care across the continent remains limited, despite recent progress in some countries. One third of Africans cannot wash their hands regularly, because they do not have access to drinking water. Lack of refrigeration to store perishable foods or medicines makes it difficult for most households to comply with stay-at-home orders. And the livelihoods of millions of workers are at risk because they have limited access to broadband connectivity, telecommuting, or other opportunities to maintain basic incomes.

Nonetheless, African governments are responding decisively to COVID-19, including instituting states of emergency, requiring physical distancing, imposing forced quarantines and restricting travel and public gatherings. And private sector companies, civil society groups and grassroots movements are joining the fight in every way they can.

For its part, the African Union, to ensure synergy and minimize duplication, adopted a common continental strategy and set up a working group to coordinate the efforts of Member States and partners. The World Health Organization is also showing determination to help African governments.

But the main challenge is the availability of resources.

Africa needs a first $ 100 billion in financial support, as sharp declines in commodity, trade and tourism prices – a direct consequence of the pandemic – are causing government revenues to dry up quickly. Meanwhile, investors’ withdrawal from risky assets has driven up the cost of borrowing in financial markets, limiting viable options for resource mobilization.

It is therefore not surprising that the average budget support package announced by African governments to date is only a meager 0.8% of GDP, one tenth of the level of advanced economies. And, beyond the short term, the continent’s additional financing needs could reach $ 200 billion.

Of course, international and regional institutions are stepping up to complement national efforts. The African Development Bank recently issued a $ 3 billion “Fight COVID-19” social bond, while the African Import-Export Bank set up a $ 3 billion credit facility.

In addition, the G-20 recently call for a coordinated collective response to help the world’s most vulnerable countries, pledged to provide immediate resources on a voluntary basis, and instructed finance ministers and central bank governors to develop a plan of action. International organizations, including the World Bank, the International Monetary Fund, the United States Agency for International Development, the Global Fund and Gavi, the Vaccine Alliance, have all announced programs to support developing countries. And the strong uptake of these programs by African governments illustrates the resource shortages they face.

Despite these efforts, however, the global action and support for Africa to date has not gone far enough. We therefore strongly support the urgent call by the IMF and the World Bank for bilateral debt relief for low-income countries. In addition, we believe that this should be accompanied by a parallel treatment of private and commercial debts, which now represent a important part of the external debt of many African countries.

Because time is running out, we call for a two-year halt on all external debt repayments, both interest and principal. During this status quo, the G-20 should task the IMF and the World Bank to undertake a comprehensive debt sustainability assessment and consider further debt restructuring, if necessary, to preserve or restore sustainability. debt.

Debt relief is also expected to extend to middle-income countries which are currently experiencing capital flight and unsustainable debt burdens. Assessments of the debt sustainability of these economies must go beyond the debt-to-GDP ratio and also take into account the ratio of debt service payments to government revenues. Several middle-income countries are currently spending 20% or more of their income on debt service, which crowds out much-needed spending on health, education and infrastructure.

Benefiting from immediate debt relief, African governments should focus on protecting vulnerable populations and strengthening social safety nets. And, like other governments, they should also support the private sector, especially small and medium-sized enterprises. This includes paying off the arrears of these companies and ensuring minimal disruption to credit flows, in order to avoid a deeper and more prolonged banking and economic crisis.

Such measures will help to preserve jobs. Without them, Africa could face an unprecedented human and economic catastrophe that could turn into even more costly political and social instability.

The COVID-19 pandemic has revealed the extent of our interdependence, reminding us how closely the fates of all countries are intertwined. The global health system is only as strong as its weakest link: Success in tackling the pandemic in any country will be short-lived until every country succeeds.

Beyond immediate responses, the pandemic and its economic fallout therefore highlight the longer-term efforts needed to strengthen Africa’s health systems, diversify its economies and broaden national revenue sources. Achieving these goals is important not only for the continent, but for the whole world.

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Over Half of Thai Household Debt Is Good Debt, Ministry of Finance Says Thu, 11 Mar 2021 06:07:50 +0000

BANGKOK (NNT) – Although Thai household debt has increased due to the COVID-19 crisis, household debt in many countries has also increased.

Over half of typical household debt is good debt, including home loans and business loans. The government and the Bank of Thailand (BOT) have continuously taken steps to help debtors repay their creditors.

Bureau of Fiscal Policy (FPO) adviser Wuttipong Jittungsakul said today that the COVID-19 situation has caused the economy to contract in 2020, raising the level of household debt relative to the product. gross domestic (GDP) at 86.6% in the third quarter. from last year.

The figure was calculated using the country’s GDP growth rate in 2020, a negative rate of 6.1%.

Other countries, such as Australia, Norway, Sweden, the Netherlands, Canada, South Korea and Malaysia, have also experienced similar circumstances. The ratio of household debt to GDP increased from 87.5% to 128.1%.

Over half of Thai household debt is good debt, as people have taken out loans to improve their quality of life. Thirty-four percent were home loans, 30 percent were for personal consumption, 18 percent were business loans, and 13 percent were car and motorcycle loans.

Since the COVID-19 crisis, the government and the central bank have implemented debt relief measures, such as lengthening repayment terms, suspending debt repayments, reducing debt rates. ‘interest, the implementation of debt restructuring and the waiver of interest payments. As a result, most debtors are able to repay their loans as usual, while the number of people asking for help has decreased. Once the economic situation improves, household indebtedness is expected to decline.

Information and sources
Reporter: Praphorn Praphornkul
Writer: Tarin Angskul
National Information and Public Relations Office:

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Black farmers unconvinced by Vilsack’s vow to “uproot” against racism Thu, 11 Mar 2021 06:07:50 +0000

This is an archived article and the information in the article may be out of date. Please look at the history’s timestamp to see when it was last updated.

BEAUTIFUL PLAIN, Kan. (AP) – President Joe Biden’s appointment of Tom Vilsack as head of the Agriculture Department has sparked a cold reaction from many black farmers who argue he hasn’t done enough to help them last time he held the position.

Vilsack, a former governor of Iowa who served for eight years as secretary of agriculture under President Barack Obama, has tried to assure minority farm groups and senators who will vote on his confirmation that he will work to “eliminate generations of systemic racism” in the agency.

“The reality is that there are inherent and legacy barriers and practices that have prevented black farmers and other producers from accessing the programs, and I will do everything possible to remove those barriers,” Vilsack said in an e- mail to the Associated Press.

John Boyd Jr., a farmer from Virginia who is president of the National Black Farmers Association, expressed his concerns in several conversations with the nominee.

“I told him he had to do better this time,” Boyd said.

Some black farmers criticize Vilsack for failing to adequately address a backlog of discrimination complaints that predated his arrival in the department in 2009, and they say he should have hired more minorities into high-level positions.

There is also a lingering bitterness about Vilsack’s treatment of Shirley Sherrod, a black woman who served as USDA’s rural development director in Georgia. Vilsack fired her in 2010 after a Tory blogger posted an edited video of her supposedly making racist remarks, but asked her to return when the full video surfaced, showing that she had been taken out of context. Sherrod declined the offer to come back.

“We’ve already seen what Vilsack is going to do. We don’t have a prayer if he gets in there, ”said Rod Bradshaw, a 67-year-old black farmer who raises wheat, cattle and milo on 2,000 acres near Jetmore, Kansas.

Some black farmers want Biden to sign an executive order they wrote to end foreclosures on black-owned farms and make other civil rights reforms.

At the Senate confirmation hearing last week, Vilsack told lawmakers he plans to have a fairness commission or task force review all USDA programs to identify instances of inherent racism. and propose solutions. The ministry’s appeal process for access to program benefits “cannot be laundering,” Vilsack said.

Vilsack’s appointment unanimously cleared the Agriculture Committee, but the full Senate has yet to vote to confirm it.

Abraham Carpenter, a 58-year-old black farmer whose family grows fruits and vegetables on about 1,500 acres near Grady, Arkansas, said it made no difference to black farmers if the nation’s president was Obama, Biden or Donald Trump: We’ve been treated badly for so long, we just want to be treated fairly now. “

His complaints are typical of those cited by other minority farmers who claim they have been unfairly denied agricultural loans and other government assistance. Carpenter said he sent Vilsack several messages about his issues and never heard back. He said Trump’s Agriculture Secretary Sonny Perdue was more responsive than Vilsack.

“When the Obama administration was there – and I love President Obama, I voted for him – I’ll be honest he got a pass,” Carpenter said.

But Vilsack’s supporters argue that lending to black farmers was a priority during his time in the department. At the start of Obama’s first term, the USDA provided 557 direct agricultural loans to black farmers, which is less than 2.4% of all direct loans. By 2015, that number had grown to 945 loans, with nearly 3.4 percent of direct loans going to black farmers.

By comparison, the number of direct loans to black farmers during the Trump administration fell by almost half: 460 loans, or about 1.8% of direct agricultural loans, in 2020.

They say Vilsack created the department’s first minority farmer advisory committee and restored the Civil Rights Office’s travel budget to investigate complaints of discrimination.

Joe Leonard, a black man who was assistant secretary for civil rights at the Agriculture Department under Vilsack, said he believed Vilsack had already done an “extraordinary job” against racism in the department and that he was doing so. would do even more in the Biden administration.

But Lloyd Wright, a black farmer from Montross, Va., Who also worked at the USDA during Vilsack’s time, criticizes Vilsack for not doing enough for the Senate to extend the statute of limitations for the backlog. of 14,000 complaints of discrimination accumulated during the George W. Bush administration. The Vilsack department did a lot of paperwork but didn’t save a single black farm, Wright said.

“We are disappointed,” Wright said. “With everything the black community has done to get (Biden) elected, get him senators, etc. can’t you find anyone else?

At the heart of many discrimination complaints are the County Committees of the Farm Service Agency, locally elected advisory councils that share information with their farming communities and who in the past had the power to make lending decisions. . After a statistical analysis showed their lack of diversity, Vilsack directly appointed members of minorities to more than 300 county committees.

Vilsack told lawmakers during his confirmation hearing that he would be willing to exercise this power again if necessary to bring more diversity to these county committees.

The USDA said Tuesday that Vilsack also supports legislation designed to provide immediate debt relief to minority farmers to help them respond to the economic impacts of the coronavirus pandemic.

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How have the Washington Consensus reforms affected economic performance in sub-Saharan Africa? Thu, 11 Mar 2021 06:07:50 +0000

Economist John Williamson coined the term “Washington Consensus” in 1989, in reference to a set of 10 market-oriented policies that were popular among Washington-based political institutions, as policy prescriptions for improving economic performance. in Latin American countries. These policies focused on fiscal discipline, domestic market-oriented reforms, and openness to trade and investment. In African countries, the Washington Consensus has inspired market-based reforms mandated by international financial institutions (IFIs) such as the World Bank and the International Monetary Fund (IMF), as part of “structural adjustment programs” (PAS), often as a prerequisite for financial aid.

The socio-economic effect of these policies remains widely debated to this day. Most of the early writings revealed that they had failed to improve socioeconomic conditions in African countries for several reasons due, among other things, to the failure to take political economy into account in African countries. countries, and conditionality and reform policies that did not sufficiently emphasize the role of local ownership. in domestic economic policy. More than three decades after the first reforms, in a new paper, we revisit the evidence for links between the adoption of these Washington Consensus policies and economic performance in sub-Saharan Africa.

We find that after the initial declines in per capita economic growth in the 1980s and 1990s, countries that adopted the reforms experienced notable increases in real GDP per capita growth in the post-2000 period. We complement the overall analysis with four country case studies that highlight important lessons for effective reform. In particular, the ability to implement pro-poor policies alongside market-oriented reforms has played a central role in the success of policies. The findings of this paper could offer a useful guide for policymakers as they accelerate structural reform programs to rebuild better post-COVID economies.

The ability to implement pro-poor policies alongside market-oriented reforms has played a central role in the success of policies.

Washington Consensus Reforms and Socio-Economic Performance

Some of the key policy reforms of the Washington Consensus / SAP period of the 1980s and 1990s included privatization, fiscal discipline, and trade openness, which were introduced by the IFIs as conditions for countries’ debt relief. very indebted and economically limited Africans. Market-oriented reforms were expected to correct price distortions induced by national policies, such as overvalued exchange rates, subsidies which led to artificially low agricultural prices, wage rates high, low interest rates and subsidized agricultural input prices, which have introduced inefficiencies in resource allocation, worsening shortages and reduced economic output. Several African countries adopted these policies, often under conditionality, in the 1980s and 1990s. Most early publications find that the policies have failed to improve economic conditions in these countries, as the IFI conditionality policy has helped undermine the role of local ownership in shaping national economic policy. In addition, government spending cuts have often reduced spending on pro-poor programs, and the removal of agricultural subsidies has made it difficult for African farmers to compete in international markets. The results have been an increase in unemployment and socio-political unrest in several African countries during this period. More recent literature has pointed out that reforms are successful in improving economic growth when policymakers have the capacity of the state to implement them and, most importantly, reforms are associated with pro-poor policies led by the government. governments.

A stable government and socio-political environment, focused on pro-poor policies, was an essential element in the implementation of successful reforms.

Using more recent data, we revisit the market-oriented reforms of the 1980s and 1990s, including privatization, fiscal discipline and trade openness. Between 2000 and 2019, African economies experienced remarkable improvements in economic growth, with median growth in real GDP per capita rising from 0.2% per year on average in the 1980s and 1990s, when most reforms were implemented. were first implemented, at 1.6% in 2000 to 2019. Inflation rates in the region also declined from double digits to double digits in the 1980s and 1990s to stabilize at around 5 % over the past two decades.

By comparing reformed countries to unreformed countries, we find that during the early years of reform, economic performance was worse for reformers, with average real GDP growth per capita declining in the 1980s and 1990s. In contrast, adopters Non-reformists experienced positive growth during this period, in line with previous literature showing that reforms did not result in short-term economic growth. Between 2000 and 2019, the average GDP per capita was higher than during the 1980s and 1990s, for both reformers and non-reformers. However, the increase in growth was even higher for adopters of the reform. When we look at these comparative statistics by reform category, the difference in performance between reformers and non-reformers is largely due to the adoption of fiscal discipline and domestic market-oriented reforms. While it is difficult to draw firm conclusions, the results indicate a reversal in the economic fate of reform adopters over the past two decades, after their dismal initial economic performance in the 1980s and 1990s.

To enrich the aggregated analysis, we conduct four case studies to Ethiopia, Nigeria, Uganda, and Senegal, which allow a more granular and nuanced assessment of the effect of the reforms. Overall, the case studies support the overall findings and reveal useful lessons on the correlates of successful reform implementation. A stable government and socio-political environment, focused on pro-poor policies, was an essential element in the implementation of successful reforms. Fundamentally, simultaneous efforts to minimize the potential negative impacts of macroeconomic reforms on the well-being of national populations are important to increase the necessary public support for reforms.

Key lessons from the Washington Consensus reforms in Africa

The speed with which many of the reforms were initially carried out, especially national reforms like the privatization of state-owned enterprises, without careful consideration of the incomplete market environment and institutional challenges facing African governments, has affected the The initial effectiveness of policy implementation and contributed to the decline in growth rates during the reform period from 1980 to 1999.

The Washington Consensus framework contained some caveats that were subsequently lost in policy design.

The Washington Consensus framework contained some caveats that were subsequently lost in policy design, creating wedges between the theory of policy reform and the realities of implementation. He cautioned against liberalizing the capital account and, most importantly, warned that privatization should only be done with strict regulation in competitive markets. They also argued for pro-poor tax spending and advised against abolishing deregulation designed for safety or environmental reasons. In practice, African governments seeking immediate debt relief were often under significant pressure to quickly comply with IFI policy measures under debt conditionality. The weakening of state apparatuses essential to the implementation of effective reform has further reduced the ability of African governments to effectively regulate the pace of policy adoption, with sometimes adverse consequences for their populations during the decade. initial reform period.

While there is no panacea for economic reform, the following lessons provide a useful general guide for moving forward: initial conditions of development and socio-political environment, among others. Second, local government ownership of the reform program with stakeholder buy-in is important to encourage support for reforms and increase the chances of success. Third, the negative spillover effects of reform policies must be minimized. Investing in social safety nets is a crucial part of reforms aimed at protecting the most vulnerable populations in countries. Fourth, when reforms aim to achieve macroeconomic stability, they should not sacrifice social investment in human capital such as education and health. Finally, reforms should be a process of continuous reassessment, adjustment and recalibration during the reform period. There is no and never will be a one-size-fits-all approach to economic development, and the reform agenda must be approached with caution and flexibility.

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Coronavirus: Pope Francis calls for debt relief and an end to sanctions Thu, 11 Mar 2021 06:07:50 +0000

Pope Francis implored world leaders not to forget the vulnerable in a call for global solidarity during the coronavirus pandemic.

He called for a “relaxation” of international sanctions and a “reduction, if not cancellation” of the debt of poor countries during his Easter Sunday blessing.

These sanctions “make it difficult for the countries on which they have been imposed to provide adequate support to their citizens,” Pope Francis said.

“Now is not the time for indifference, because the whole world is suffering and must be united to face the pandemic,” he said, saying it was a challenge “shared by all”.

He spoke during a surprisingly empty Easter service at St. Peter’s Basilica due to the coronavirus outbreak.

Normally, St. Peter’s Square, the square leading to the Basilica, would be filled with worshipers on Christianity’s most important holiday.

Thousands of churches across Europe, the United States and the world have instead planned “virtual” Easter services because of the virus.

Pope Francis said the European Union in particular faces a “period challenge” due to the virus outbreak.

“After the Second World War, this continent was able to recover, thanks to a concrete spirit of solidarity which enabled it to overcome the rivalries of the past”, he declared.

“It is more urgent than ever, especially in the current circumstances, that these rivalries do not regain strength, but that all recognize each other as part of the same family and support each other.”

The European continent has been the hardest hit by the pandemic with more than 800,000 cases and more than 70,000 deaths.

The pontiff also reminded his followers of the other horrors of the world, including the conflicts in Syria and Yemen and the plight of refugees fleeing war, droughts and famine.

“Indifference, egocentricity, division and oblivion are not words we want to hear right now. We want to ban these words forever,” Pope Francis said.

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IMF, Zambia continue debt relief negotiations Thu, 11 Mar 2021 06:07:50 +0000 The debt-ridden southern African country became the continent’s first sovereign default in the coronavirus era after it ignored a $ 42.5million (€ 35.5million) interest payment on one euro – bond in November of last year.

FILE: Virtual talks between the two sides began on February 11 and ended on Wednesday without a final decision. Image: 123rf.

LUSAKA, Zambia – The International Monetary Fund (IMF) said on Thursday that talks with Zambia over a possible bailout will continue over the coming weeks to address remaining fiscal challenges.

The debt-ridden southern African country became the continent’s first sovereign default in the coronavirus era after it ignored a $ 42.5million (€ 35.5million) interest payment on one euro – bond in November of last year.

The Zambian authorities requested funding from the IMF in December to finance reforms and deal with rising external debt of nearly $ 12 billion, of which about $ 3 billion is owed to China.

Virtual talks between the two sides began on February 11 and ended on Wednesday without a final decision.

“Significant progress has been made and discussions are expected to continue in the coming weeks,” the IMF said in a statement on Thursday.

“Major challenges remain,” he added, citing, among other things, the tax reforms to be implemented and efforts to use public resources more efficiently.

IMF team leader David Robinson said the parties had reached “broad agreement” on the causes of Zambia’s “underlying macroeconomic imbalances”.

“Solving the macroeconomic challenges will require navigating the need to continue supporting the population… through the pandemic in a tax-constrained environment,” he noted.

Zambia has requested a restructuring of its loans as part of a new G20 debt suspension initiative.

Analysts believe enforcement will be easier if Zambia is under an IMF program.

The copper-rich country missed a second Eurobond coupon payment of $ 56.1 million in January, shortly before entering the G20 framework.

The IMF called for greater transparency on debt and spending, and an end to the build-up of domestic arrears.

He said that a recent sharp increase in copper prices was an opportunity to “help smooth out the adjustment”.

The Zambian government said the talks had been “positive and constructive”.

“The government is committed to securing a program with the IMF,” Finance Minister Bwalya Ng’andu said in a statement.

“We (…) will continue our discussions on detailed policing measures to put our economy and public finances back on a sustainable course.”

The government is working to recover from the economic setbacks of the coronavirus and garner public support ahead of the August general election.

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