The Monterrey Consensus called for a debt architecture that promotes fair burden-sharing and minimises moral hazard, but in this blog for Development Progress’ financing progress series Aldo Caliari reflects on how far we are from fulfilling this consensus. In particular he looks ahead to concerns relating to possibly unsustainable infrastructure debt post-2015. He urges caution regarding Public-Private Partnerships, and concludes by arguing for new thinking on financing infrastructure.
“There are signs that debt will threaten the finance of a new set of goals, post-2015, casting a long shadow over their feasibility.
Of the world’s over seventy low-income countries, two are in debt distress, 13 at high risk of debt and 28 at moderate risk, including some that already benefit from debt relief initiatives. Since 2010, five Caribbean countries have had to restructure their debts. The restructuring of sovereign debt in Greece shows that debt is no longer a phenomenon exclusive to developing countries. And eight years after Argentina’s sovereign debt restructuring, the ability of a small number of creditors to derail that process, at the expense of the debtor and other creditors, is a sobering reminder of just how far we are from fulfilling the Monterrey Consensus call for mechanisms that promote fair burden-sharing and minimise moral hazard.”
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