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Tag "Debt"

manuel_montes-tnDebt_Sustainability

On 10 September 2015, at its Sixty-Ninth Session, the UN General Assembly in plenary session adopted the resolution on “Basic Principles on Sovereign Debt Restructuring Processes” (A/RES/69/319) in New York, with 135 member States voting for, six against and 42 abstentions.  On the grounds that it would create uncertainty and reduce external financing for developing countries, the United States, supported by developed country allies – European Union countries, Japan, Australia and New Zealand – voted against the proposed General Assembly effort to start work toward a multilateral legal framework in the UN.

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Khor 1Marinate_TradeThis Merdeka Day, we should celebrate how the country has developed relatively well, but also reflect deeply on how to get out of the economic stresses which have reached a crisis point.

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Khor 1Debt_SustainabilityThe slide in the ringgit’s level is a symptom of weaknesses in the Malaysian economy which were exposed with recent changes in the global economic conditions, and policy actions must now be taken to address the serious problems.

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Khor 1EU_CrisisWhen a country mismanages its debt, it can lose its sovereignty and dignity – a lesson that is being imposed again on the Greek nation.

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EU_CrisisKhor 1This week will see the resolution for two important issues – the fate of the Trans Pacific Partnership and of the Greek debt crisis – both of which will affect Malaysia.

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manuel_montes-tnDebt_SustainabilityThe lack of an appropriate multilateral legal framework, allowing the utilization of a predictable and rapid mechanism to guide the restructuring of sovereign debt generates the proliferation of incentives that dramatically increase costs both for debtors and “good faith” creditors. The recent experience of Argentina demonstrates that it is possible for “vulture funds” to get rulings in excess of the legal and contractual framework. Over the past three decades, the changes that took place in global finance, combined with the political, institutional and legal reforms that have accompanied these processes, consolidated a set of new challenges for sovereign debt restructuring processes. The improvements in debt contracts provisions do not fully resolve the problem. Furthermore, the establishment of a statutory mechanism that ensures a set of conditions that should be respected by all countries subscribing the agreement would be necessary even for such clauses to be effective.

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manuel_montes-tnConsumptionDeveloping countries—emerging, middle-income, and least developed—will be going to the Third Financing for Development (FfD) Conference in Addis Ababa in July 2015 with a set of demands to reform and rebalance the international financial system in order to facilitate the realization of the Sustainable Development Goals (SDGs).

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yilmaz-akyuzDebt_SustainabilityIn this column, Yılmaz Akyüz, chief economist at the South Centre in Geneva, looks at the role of international debt workout mechanisms in debt restructuring initiatives and argues, inter alia, that while the role of the IMF in crisis management and resolution is incontrovertible, it cannot be placed at the centre of these debt workout mechanisms because its members represent both debtors and creditors.

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YueFen LiDebt_SustainabilityThe lack of a formal sovereign debt restructuring mechanism has been considered by many as a serious deficit or missing link in the international financial architecture. However, even though the international debates on the topic have been going on for decades, heating up each time with the onset of a debt crisis and cooling down when the crisis was contained, up to now such debates have not yet come to fruition. With the onset of the global financial crisis and especially the legal litigation against Argentina, the debate has become even more intensified with views more convergent than ever on the need of a mechanism.

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Khor 1Debt_SustainabilityAs the country’s external debt has become a topic of debate and confusion, it is useful to review the situation.

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