The Commonwealth Secretariat has launched a new debt transparency handbook that offers governments, including those in the Caribbean, a clear roadmap to align their public debt operations with international standards.
By using the guidelines in the handbook, governments can have accurate and reliable information about their debt obligations, enabling them to make informed economic decisions that ultimately will be beneficial to their citizens.
In addition, enhanced transparency will allow lenders to have full information before extending further loans, while holding governments more accountable, reducing uncertainty for investors, and boosting market confidence.
The ‘Handbook on Public Debt Transparency’ was launched on 5 October 2023 at a virtual event, attended by government officials, debt experts and development specialists from across the Commonwealth.
An easy-to-use tool
Opening the event, the Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC, described the new handbook as a practical guide for debt managers, highlighting that inflation has significantly changed public debt from concessional financing to more expensive loans.
She pointed out that 32 Commonwealth countries are carrying debt-to-GDP burdens of over 60 per cent, adding that: “Managing these unsustainable debt levels hampers the capacity of governments to invest in essential social services for their citizens.”
Drawing upon the Commonwealth Secretariat’s 40 years of experience in debt management and recognised good practices, the handbook provides officials with an easy-to-use self-assessment tool to evaluate the transparency of their debt operations, including transactions, terms and conditions.
Where necessary, the assessment outlines specific measures that countries can take to address any shortcomings in accordance with national commitments and international standards.
‘A challenging task’
Secretary-General Patricia Scotland also noted:
“Achieving debt transparency can be a challenging task, but it is essential for debt sustainability.
“It’s for this reason we have developed this handbook to guide debt managers through the various standards and how those can be applied within their local contexts to achieve more transparent, open and accountable public debt management while mitigating potential risks.
“Now is the time for proactive implementation.”
The handbook also consolidates expert advice from a range of sectors, including national debt management offices and international financial institutions, to offer insights into what constitutes good practices for transparency in debt collection, recording, reporting, and servicing.
Through this comprehensive approach, the handbook outlines actionable steps that countries can take to ensure they cover all government liabilities, maintain accurate data records, provide consistent reports, and share information effectively with stakeholders.
‘A timely response’
During the event, Dr Ruth Kattumuri, Senior Director of the Commonwealth Secretariat’s Economic, Youth and Sustainable Development, said the launch of the handbook is timely in light of the various global shocks causing debt distress in many developing nations.
She added:
“Our handbook outlines public debt management principles for disseminating timely, comprehensive, accurate, accessible and intelligible debt data reporting, policies and operations to enhance debt transparency practices.
“This enhanced transparency is important because it not only helps countries address the unsustainable levels of public debt but also allows them to make full use of the borrowed funds to improve social services, support efficient fiscal management, raise living standards and achieve sustainable and resilient development.”
Participants from governments and international organisations expressed strong support for the handbook during the launch, welcoming it as “an essential tool” for debt managers across the Commonwealth.
The handbook is part of a package of resources developed by the Commonwealth Secretariat’s Debt Management Unit to support countries in strengthening their debt management systems.
Among those resources is the Commonwealth’s flagship debt management system, Meridian, which is being used by 47 countries around the world.
Furthermore, the issue of debt sustainability will be a key point of discussion at the annual meeting of Commonwealth finance ministers in Morocco this week.
