• Commonwealth:
• Finance ministers discuss managing debt in times of economic crisis

Finance ministers discuss managing debt in times of economic crisis

22 April 2009

Meeting in Washington will enable ministers from low income countries to discuss the proposed response and assistance of the international community

Finance ministers from low income African and Caribbean regions are meeting in Washington DC today, 22 April 2009, to compare notes on how to deal with the impact of the economic slowdown on their people and ensure that never again will their populations have to labour under unpayable debt.

This meeting will also enable ministers to discuss frankly these issues with the International Monetary Fund (IMF) and World Bank, questioning the proposed response and assistance of the international community to help these countries.

The meeting - which continues up to tomorrow, 23 April - is taking place at the World Bank�s headquarters. It is jointly organised by the Commonwealth Secretariat and the Organisation Internationale de la Francophonie.

"Debt has for a long time been an issue for most of these countries. We might have thought that this was yesterday's news, but now with the economic troubles, there is fear that progress the countries had made in securing debt relief and managing their debt may be lost due to a decline in trade, remittances, investment and aid," said Jonathan Ockenden, Head of International Finance and Capital Markets at the Secretariat.

"With government revenue falling and pressures to increase spending, countries may be under more pressure to borrow to help offset the impact of the crisis and meet the reasonable expectations of their people. As financing conditions deteriorate there is a real risk that countries could get into debt problems," said Samantha Attridge, the Secretariat�s adviser on Global Issues.

She added: "Without effective management and international support, there is risk to the hard won economic stability in these countries."

The ministers will discuss, among other things, what their countries need to do to avoid slipping back to the problems of excessive and unmanageable debt; the adequacy of the response of the IMF and World Bank; and share practical experiences in dealing with the crisis, and debt management.

They will also discuss aligning debt sustainability analysis to make it more flexible to ensure the attainment of the Millennium Development Goals, as well as ways of continuing the advocacy for delivery of donor commitments on aid quality and effectiveness.