Assessment of Debt Restructuring Operations in Commonwealth Small States

image of Assessment of Debt Restructuring Operations in Commonwealth Small States

An increase in external shocks, international terrorism and natural disasters over the past two decades has led to unsustainable debt burdens in small and vulnerable states, resulting in debt restructuring programmes.

This paper highlights the concerns of Commonwealth small states about their growing debt burden and the emerging challenges to their overall debt sustainability. It pinpoints the factors that lead to debt, the hurdles involved with debt restructuring and the weaknesses involved in debt management. It offers key lessons learned based on the experiences of seven small Commonwealth countries that have restructured their debts: Antigua and Barbuda, Belize, Dominica, Grenada, Jamaica, St Kitts and Nevis, and Seychelles.



The Current Debt Restructuring Architecture and Adequacy of Relief

Despite the debt restructuring operations undertaken by the Commonwealth-7, all continue to face high, unsustainable debt burdens. This is particularly evident among the small middle-income Caribbean states; average public debt levels for the region amounted to 90.0 per cent of GDP at the end of 2013 and average public debt levels among Commonwealth-7 Caribbean states amounted to 95–100 per cent of GDP.


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