The Commonwealth Secretariat and the United Nations Conference on Trade and Development (UNCTAD) have joined forces to create a pioneering resource to support countries facing tough decisions on public debt.
The new Debt Data Quality Assessment Framework (Debt-DQA) will help countries generate more reliable data for critical decision making on public borrowing. Debt managers are now able to perform a six-point data quality self-assessment of their databases, identify risks and weaknesses, and formulate short- and long-term plans to remedy them.
Commonwealth Secretary-General Patricia Scotland said: “This tool provides a crucial resource at a time when central banks and governments worldwide are being forced to inject trillions of dollars’ worth of stimulus to protect their economies from the detrimental effects of COVID-19-induced recessions.
“Reliable and comprehensive debt data is key to high quality statistics, economic analysis and financial transactions. This has become ever more important, particularly for small states and least developed countries facing such an uncertain economic environment.”
As reported by the Institute of International Finance, an expected 3 per cent worldwide economic contraction and a doubling in government borrowing from 2019, could see a 20 per cent rise in global debt-to-GDP ratio this year to 342 per cent.
The Head of the Commonwealth Secretariat Debt Management Unit, Pamela McLaren, said the new tool will be invaluable to debt managers who continue to face challenges in recording, monitoring, and disseminating debt data that is free from errors and omissions.
She added: “Commonwealth countries are still reeling from the unprecedented and devastating economic impact of the COVID-19 pandemic. Now, more than ever, it is imperative that every decision made about public debt is based on reliable, transparent and efficient data.
“This is the only way to accurately assess both short-term and long-term impacts of any debt agreement and avoid going down a path that can have detrimental effects on a country’s economy.”
The framework, she said, would boost the effectiveness of the Commonwealth’s Meridian debt management programme and UNCTAD’s Debt Management and Financial Analysis System.