Public Debt Management in
Developing Countries:
Key Policy, Institutional, and
Operational issues
by Tomás J. Baliño and V. Sundararajan
Centennial Group Holdings, LLC
Table 1: Evolution of Foreign Currency and
Short Term Debt in Selected Countries
Foreign currency debt
Total Marketable debt
Short
term
debt
Total domestic mkt. debt
(in percent)
Brazil
Colombia
Czech Republic
Hungary
India
Indonesia
Malaysia
Mexico
Philippines
Poland
South Africa
Thailand
Turkey
1996
2005
1996
2005
48
30
13
30
0
n.a.
5
67
16
27
3
49
31
14
25
13
26
0
6
7
29
34
22
10
7
37
57
0
56
15
19
0
5
29
55
42
6
0
60
22
6
16
22
3
0
2
23
29
8
6
24
7
Table 2: Selected foreign debt
burden indicators
COUNTRY
GROUP
1996
INDICATOR (%)
Total debt /Exports of
goods and services
Low Income
Lower
Total debt /Exports of Middle
goods and services
income
Upper
Total debt /Exports of middle
goods and services
Income
Total
debt
/Gross
National Income
Low income
Lower
Total
debt
/Gross middle
National Income
income
Upper
Total
debt
/Gross Middle
National Income
Income
Source: Global Development Finance
2005
259.42 92.79
144.2 61.14
116.43 83.48
51.02 27.63
33.2
24.08
38.25 35.65
Public debt management issues
• Requirement: Sound macroeconomic
policies
– Fiscal
– Monetary
• Objectives:
– Sustainable debt path (DSA)
– Minimize government debt cost (Guidelines)
Guidelines for Public Debt
Management
• Debt management objectives and coordination
• Transparency and accountability
• Institutional framework
• Debt management strategy
• Risk management framework
• Development and maintenance of an efficient market
for government securities
Implementing Guidelines--Progress
• Improving Debt Structure
• Developing and Publishing Debt
Management Strategy
• Improving Governance Framework
• Improving Transparency and
Communication with the Market
• Developing Domestic Public Debt
Markets
Implementing Guidelines-Problems
• Incomplete Strategies
• Fragmented Responsibilities
• Lack of Medium-Term Debt Strategy
Key Issues
• Comprehensive, publicized debt
strategy
• Asset-liability management
framework
• Coordination with central bank
• Development of domestic debt market
Conclusions
• Progress has been made
• Need to avoid past problems
• Sound macroeconomic
management
• Upgraded debt management
• Country ownership and
international cooperation