Debt Problem of Small Vulnerable Economies

Commonwealth member states have long been concerned about the financing and debt challenges facing Commonwealth Small Vulnerable Economies (CSVEs). This concern led both Commonwealth Finance Ministers and Heads of Government in 2009 to ask the Secretariat to develop innovative solutions to address these challenges. Subsequently, the Secretariat has undertaken an extensive work programme to understand the nature of this challenge and develop possible options for consideration by the international community to address this issue.

Commonwealth Meeting on Debt Challenges of Commonwealth Small Vulnerable Economies (CSVEs), 9 October 2012, Tokyo, Japan

The Secretariat is building on on-going work by convening a meeting of Ministers of Finance of the Commonwealth’s Small Vulnerable Economies to discuss the debt challenges of CSVEs.  The meeting will be held on 9th October, 2012 in Tokyo in the margins of the IMF/World Bank Group Annual Meetings

This special ministerial meeting will revisit with CSVE Ministers the policy options developed by the Secretariat and discussed at CFMM 2010.  The aim of the meeting is to establish a framework for Commonwealth advocacy developed and led by Commonwealth SVE Ministers themselves and supported by the Commonwealth Secretariat.

Meeting Documents

CSVE(12)1 - Draft Agenda CSVE Debt Ministerial 2012

CSVE(12)1 Supplement - Annotated Draft Agenda

CSVE(12)2 - The Debt Challenges of Commonwealth Small Vulnerable Economies

CSVE(12)3 - Review of Debt Restructuring Initiatives

The Secretariat’s work programme has centred on two key issues:

• How can CSVEs address the existing solvency issues posed by current debt levels?
• How can CSVEs be financed in the future to ensure that long-term debt sustainability is achieved and maintained in light of their inherent structural vulnerabilities?

This work programme has yielded an extensive range of analysis and background papers. Collectively they represent an important advance in the empirical and analytical foundations required for addressing this complex challenge. The work has involved:

Debt Data Collection - The Secretariat collated data from Commonwealth SVEs in order to more accurately quantify their sovereign debt position.

Expert Meeting June 2010 - An expert panel was convened in June 2010 to explore and discuss possible policy options to address the looming debt problem of Commonwealth Small Vulnerable Economies.

Policy Development Papers - The Secretariat has worked with a number of leading experts to develop policy options to address the emerging debt problem.

Consultative Policy Workshop Jamaica 2010 - Senior CSVE officials met in Jamaica in September 2010 to examine and discuss proposed policy options. Discussion centred around:

• Options for debt relief
• Options to address the future financing and debt sustainability challenge – reform of aid allocation criteria
• Options to address the future financing and debt sustainability challenge – Establishment of an Automatic Shock Facility
• Reform of the International Insolvency Mechanism
  

These options were also discussed by Commonwealth Finance Ministers at their meeting in September 2010 (CFMM 2010).