Well here we are again series#

Of the 32 IDA-eligible countries at high risk of, or in, debt distress in FY18, only 10 had received support over the previous decade from the World Bank to improve their public investment management capacity. Indeed, over the last decade, public investment management diagnostics were undertaken by the Bank for less than half of countries eligible for concessional resources from IDA, the World BankвЂ™s fund for the poorest countries, with demand concentrated among higher-income LICs. However, as the IEG evaluation demonstrated, this was not systematically accompanied by similar attention to the quality of public investment management (PIM), which includes the ability to systematically and transparently scrutinize the costs and benefits of public investment, in infrastructure as well as other sectors. Appropriately, development partners extended significant support to enhance debt management capacity over this period, with many positive results in terms of the number of countries that met minimum standards of good practice for debt management. IEGвЂ™s February 2021 Evaluation of World Bank Support for Public Financial and Debt Management in IDA-eligible Countries, focusing on the decade following the 2008 global financial crisis, notes that many LICs sharply increased non-concessional and shorter-term borrowing to finance вЂњgrowth enhancing' public investment to close infrastructure gaps and meet global development goals.

Well here we are again series#

The Independent Evaluation Group (IEG) recently completed the third in a series of macro-fiscal evaluations that consider, among other things, the evolution of debt stress in LICS, and offer insights to enhance the effectiveness of Bank Group support to strengthen fiscal resilience in LICs. It is true that many of the factors underpinning the rise in pre-COVID debt stress such as persistently low global commodity prices were not easily anticipated. This blog is not an attempt to claim that the current situation should have been easily anticipated (although that proposition is subject to debate) but rather to emphasize the urgency of learning from the past. Despite this, and against a backdrop of persistently low global interest rates, median interest payments from LICs rose 128% between 20. This occurred alongside significant support from the international community (and the World Bank in particular) to improve the debt management capacity of LICs. Since 2013, the number of countries eligible for concessional financing from the World Bank at high risk of, or in, debt distress has almost tripled (from 13 to 35 (33 in 2019)) and the average debt-to-GDP ratio has increased from about 40% to 60%. Unambiguously, the COVID pandemic has made things worse, but it is worth remembering that the resurgence in debt stress in LICs was evident and under active discussion in policy circles well before February 2020. Having cut my teeth on issues of debt sustainability in the mid-1990s working on the design and implementation of the Heavily Indebted Poor Countries Initiative (HIPC), I canвЂ™t help but have a feeling of dГ©jГ vu as concerns grow over debt sustainability in low-income countries (LICs).