The COVID-19 Crisis Highlights the Urgent Need for Effective Debt Management in Developing Countries, Especially the Poorest, to Mitigate New Financial Risks and Vulnerabilities. Public Financial Management Must Prioritize Effective Management of Resources and Liabilities to Address Heightened Pressures on Public Finances.
Comprehensive and Timely Public Debt Information is Crucial for Informed Policy Decisions and Risk Mitigation during the Pandemic. Transparency in Debt Data is Key for Effective Crisis Management. Lack of Clarity on Public Debt and Contingent Liabilities Hampers a Country’s Financial Management, Impairing International Support to Prevent and Mitigate Debt Crises.
Efficient Debt Management is Essential for the Successful Implementation of Emergency Financing and Debt Moratorium Measures During the COVID-19 Crisis. International Monetary Fund (IMF), World Bank, and Regional Development Banks’ Emergency Response Packages Aim to Aid Countries in Maintaining Debt Sustainability and Allocating Resources to Social, Health, and Economic Needs. As Calls for More Substantial Debt Relief Initiatives Grow, Comprehensive and Timely Public Debt Information is Crucial for the Effective Implementation of Existing and Future Measures. Developing Countries Must Have Access to Reliable Public Debt Databases and Reporting Capabilities to Record, Process, and Report Debt Restructuring and Relief Outcomes in Line with International Standards.
Despite the importance of managing public resources and liabilities, many developing and transition countries lack the necessary human and technical capabilities. Establishing reliable and comprehensive debt databases, as well as ensuring high-quality reporting, present significant challenges for governments. Weaknesses in legal and institutional frameworks, staffing, skills, and systems hinder their ability to provide accurate debt data for operational, monitoring, analytical, and policymaking purposes. These challenges are further compounded by the COVID-19 pandemic, which has led to government closures and limited remote working capacity for debt offices. As a result, managing increasingly complex debt portfolios has become a significant challenge for these countries.
The UNCTAD’s Debt Management and Financial Analysis System (DMFAS) Programme is offering ongoing assistance to developing countries in enhancing their capacity to address the socio-economic impacts of the COVID-19 pandemic. The Programme provides guidance and advisory services through its Helpdesk to ensure the accuracy and completeness of public debt records and comprehensive and timely reporting. Despite the closure of debt management offices in many countries, the Programme has implemented remote access to the DMFAS database (web-based software) in some countries with its support.