ओलीको चौथो सत्तारोहण र बोइलिङ फ्रग एक्सपेरिमेन्ट

काठमाडौं । यतिखेर २१औं शताब्दीको एक चौथाई बितिसकेको छ । तर, नेपाल अझै १९औं शताब्दीमा नै बाँचिरहेको छ ।

१९औं शताब्दीमा वैज्ञानिकहरुले भ्यागुतोमाथि एउटा अनुसन्धान गरे । धेरैले यसलाई अनुसन्धान नै मान्दछन् तर केहिले मिथक पनि भन्दछन् ।

खैर, अनुसन्धान वा मिथक जे माने पनि यसको सार यस्तो छ ।

१९औं शताब्दीमा केही अनुसन्धानकर्मीले उमालेको पानीको भाँडामा एउटा भ्यागुता हाले । भ्यागुतोले पानीको तातो सहन सकेन, तुरुन्तै बाहिर हामफाल्यो ।

तर, यसको विपरित जब अन्वेषकहरूले चिसो पानीको भाँडोमा भ्यागुता राखे । र भाँडोलाई विस्तारै तताउँदै गए । पानीको तापक्रम अचानक नबढेका कारण भ्यागुतो पनि बसिरह्यो ।

पानी तात्दै गयो, भ्यागुतोको शरीरले स्वतः पानीको तापक्रमअनुसार आफनो तापक्रम मिलाउँदै गयो । भ्यागुताले पानीको बढेको तापक्रम महसुस गरेन । किनकि, मानिन्छ, भ्यागुताको शरीरले तापक्रमअनुसार आफूलाई समायोजन गर्न सक्छ ।

तर, एउटा यस्तो समय आयो । जब भ्यागुतोको शरीरले पानीको बढेको तापक्रम समायोजन गर्न नसक्ने गरि पानी उम्लिन थाल्यो । यसबेला यति ढिलो भैसकेको थियो कि भ्यागुतो बाहिर हामफाल्नै सकेन र अन्ततः भ्यागुतोको तातो पानीमा मृत्यु भयो । यसलाई बोइलिङ फ्रग एक्सपेरिमेन्ट अर्थात् भ्यागुतो उमाल्ने प्रयोग भन्ने गरिन्छ ।

धेरैले यसलाई अनुसन्धान नै मानेका छन् भने केहीले यसलाई मिथक पनि भन्छन् । तर, भ्यागुतो उमाल्ने अनुसन्धान मिथक नै भए पनि यसमा मानवीय मनोविज्ञान जोडिन्छ ।

जसरी, भ्यागुताले धेरै ढिलो नभएसम्म तापमानमा क्रमिक वृद्धि भएको र आफू मृत्युको मुखमा पुगेको पत्ता लगाउन सक्दैन, त्यसैगरि, सर्वसाधारण मानिसहरू पनि राजनीतिक दल तथा तिनका नेताको वरिपरि प्रायः अन्धविश्वासका साथ यसरी लाग्छन् कि उनीहरूलाई आफुमाथि आउँदै गरेको संकटको महसुस नै गर्न सक्दैनन् ।

त्यसैले बोइलिंग फ्रग एक्सपेरिमेन्टलाई राजनीति अनि अर्थशास्त्रमा पनि एउटा उदाहरण मानिन्छ । विस्तारै भएका परिवर्तन राम्रो वा नराम्रो के का लागि भएको हो भन्ने बारे अधिकांश सर्वसाधारणले बुझ्न समय लाग्छ, र धेरै ढिलामात्र बुझ्न सक्छन् ।

तर, ढिला भएपछि त्यो बुझाईको कुनै अर्थ रहन्न ।

यसले सामान्य मानव मनोविज्ञानलाई पनि चित्रण गर्दछ । हामी ती चीजहरू स्वीकार गर्छौं जुन हामीमा विस्तारै तर स्थिर रूपमा आइपुग्छन् । तिनीहरूले हाम्रो जीवनलाई नियन्त्रणमा राखिसक्दा पनि हामीलाई त्यसले हाम्रो जीवनमा पार्ने नकारात्मक असरका बारेमा अनभिज्ञ नै रहन्छौं ।

तर हामी जब बुझ्छौं, आफूलाई उमालेको पानीमा भेट्टाउँछौं, र केहि गर्न सक्ने अवस्थामा रहन्नौं ।

नेपालका राजनीतिक दलहरुले पनि नेपालीमाथि बोइलिङ फ्रग एक्सपेरिमेन्ट (भ्यागुतो उमाल्ने प्रयोग) गरिरहेका छन् । पुराना राजनीतिक दलमात्र होइन, नयाँ भनिने राजनीतिक दल त झन् सुरुवातदेखि नै नेपाली समाजमाथि खतरनाक प्रयोग गरिरहेछन् ।

भोलि कुनै पनि बेला एउटा स्वच्छ छविको नेता देश परिवर्तन गर्ने आँट बोकेर आएछ भने पुराना राजनीतिक दल त सबैलाई तह लगाउन सक्छ । तर, नेपालीको भविष्यको लागि नयाँ भनिने राजनीतिक दल र तिनको नेपाली समाजमाथिको प्रयोग बढी खतरनाक छ ।

चर्को स्वरले घोक्रो फुटाएर पटक पटक झुट बोलेपछि झुट पनि सत्य हुन्छ भन्ने गोयबल्स सिद्धान्त तथा आफू र आफ्ना वरिपरिका कानुनभन्दा माथि रहेको हिटलरी दम्भ र लोकप्रियतावादले नयाँ राजनीतिक दल नेपाली समाजमाथि जुन खतरनाक प्रयोग गर्दैछ, आइतबार संसद्मा प्रधानमन्त्री ओली सायद त्यसैमा बढी केन्द्रित भए ।

हुनत ओली कमी कमजोरी नभएका नेता होइनन् । उनले अघिल्लो पटक आफू सत्ताच्युत हुन परेपछि संसद् विघटन गर्नेसम्मको दुस्साहास गरेका हुन् । इतिहासकै सबैभन्दा शक्तिशाली करिब दुई तिहाइको सरकारको नेतृत्व गरेका ओलीले अर्थतन्त्रमा पनि कुनै चमत्कार गरेका होइनन् । अझ साँच्चै भन्ने हो भने सार्वजनिक वित्तमा विकृतीको सुरुवात गरेको दोष उनीमाथि छ ।

ओलीकै प्रधानमन्त्रीत्वकालमा २०७४ सालदेखि सरकारले अन्धाधुन्धा ऋण लिने र अनुत्पादक क्षेत्रमा खर्च गर्ने कुप्रथा सुरु भएको थियो । ओलीको ४३ महिने कार्यकालमा नेपालीको सार्वजनिक ऋण २५० प्रतिशत (अढाइ गुणा)ले बढेको थियो ।

सार्वजनिक ऋण व्यवस्थापन कार्यालयको तथ्यांकअनुसार आर्थिक वर्ष २०७३/७४ मा ६ खर्ब ९७ अर्ब ६९ करोड रुपैयाँ बराबर रहेको राष्ट्रिय ऋण ओली कार्यकालको अन्तिमतिर १६ खर्ब पुगेको थियो । अहिले सार्वजनिक ऋण २४ खर्ब रुपैयाँ नाघिसकेको छ ।

आज नेपाललाई ऋण तिर्न ऋणै लिनु पर्ने अवस्था हिजो ओलीको प्रधानमन्त्रीत्व कालकै नतिजा हो ।

त्यसैले प्रधानमन्त्री केपी शर्मा ओलीले आइतबार (साउन ६) गते आफनै पूर्व कमरेडहरु नेकपा माओवादी केन्द्र र नेकपा एस तथा राष्ट्रिय प्रजातन्त्र पार्टी र राष्ट्रिय स्वतन्त्र पार्टीलगायतकाको विश्वासको मत पाएनन् ।

जम्मा २६३ सांसद उपस्थित सभामा उनको पक्षमा १८८ मत थियो भने विपक्षमा ७४ मत मात्र परेको थियो । असार ३० गते प्रधानमन्त्री नियुक्त भएका ओलीलाई एकजनाले दिन्न भन्ने पक्षमा पनि मत हाले ।

तर, चौथो पटक प्रधानमन्त्री बनेका ओलीले विश्वासको मत माग्ने क्रममा आफ्नो शैली नछोडेपनि धेरै संयमितरुपमा प्रस्तुत भएका थिए ।

नयाँ राजनीतिक दललाई लक्षित गर्दै उनले आफनो शैलीअनुरुप कहिले नेल्सन मण्डेलको त कहिले ‘बाजे र नाती’को प्रसंग सुनाए । तर आक्रामक भएनन् ।

नयाँ दाबी गर्दै आएका राजनीतिक दलले पुराना राजनीतिक दललाई भ्रष्टाचारी तथा देश विगारेको आरोप लगाउँदै नेपालीमाथि अर्को बोइलिङ फ्रग एक्सपेरिमेन्ट गरिरहेको पुराना राजनीतिका घाग ओलीले नबुझ्ने कुरै भएन ।

त्यसैले ओलीले यसपटक आफ्ना चिर परिचित प्रतिद्वन्द्वि नेकपा माओवादी केन्द्र तथा यसका सुप्रिमो प्रचण्डमाथि भन्दा पनि नयाँ दललाई बढी शब्द खर्च गरे ।

असार १७ गते सोमबार मध्यराती नेपाली काँग्रेसका सभापति शेरबहादुर देउवा र आफूबीच संविधान संशोधनसहितका विषयमा भएको सम्झौता वाचन गर्दै ओलीले नेपाल राजनीतिको नयाँ चरणमा प्रवेश गरेको दावी गरे । उनले भने, ‘यो नेपालको राजनीतिमा नयाँ चरण हो ।

‘अ न्यू च्याप्टर इन नेपाली पोलिटिक्स ।’

तर, उनले आफ्ना भनाइ सिद्ध गर्न बाँकी छ । धेरैलाई अझै पनि लागेको छ, मध्यरातमै वृद्ध नेताहरुले हतार हतार नयाँ गठबन्धनको सहमति किन गर्नु पर्यो ? एक रात रोक्नै नसक्ने के त्यस्तो बाध्यता थियो नेताहरुलाई ?

दुई ठूला दलबीच केहि महिनाअघि देखि नै छलफल चलिरहेको भएपनि दुई दलका शीर्षस्थ नेता केपी शर्मा ओली र शेरबहादुर देउवाले सोमबार मध्यराति सवा १२ बजे सहमतिपत्रमा हस्ताक्षर गर्नु पर्ने बाध्यताको बारेमा राजनीतिक वृत्तमा धेरै चर्चा परिचर्चाले अझै केहि समय बजारमा तरंगित हुन्छ नै ।

घटनाक्रम अनुसार, एमालेवृत्तमा यस्तो पनि चर्चा छ ।

असार ११ गते राती उपमहासचिव विष्णु रिमालको नेतृत्वमा नेकपा एमालेका २९ नेताहरू १० दिनको चीन भ्रमणमा गए ।

चिनियाँ कम्युनिष्ट पार्टी (सीपीसी) विदेश विभागको निमन्त्रणमा एमाले नेताहरू चीन गएका हुन् । भ्रमणको क्रममा चिनियाँ कम्युनिस्ट पार्टीको उच्च तहसँग भेटवार्ता भयो ।

त्यसअघि नेकपा माओवादीका नेताहरू पनि चीन भ्रमणमा गएका थिए । चीन गएको टोली त्यहाँको विकासमा चिनियाँ सरकारले गरेको प्रगतिको अध्ययन गरेर फर्केको जनाएको थियो ।

अझ त्यसअघि पनि चिनियाँ कम्युनिष्ट पार्टीको निमन्त्रणमा महासचिव शंकर पोखरेलको नेतृत्वमा एमालेका नेताहरु चीन गएका थिए ।

यो तारान्तरको भ्रमणमा चीन नेपालमा फेरि एकीकृत नेकपा बनाउने मिसनमा थियो । नेकपा एमालेका उपमहासचिव विष्णु रिमालको नेतृत्वमा गएको नेकपा एमालेको टालीलाई चीनले एकीकृत नेकपाको एउटा रोडम्याप नै प्रस्तुत गर्यो ।

पूर्व राष्ट्रपति विद्या देवी भण्डारीको नेतृत्व ओली, माधव नेपाल तथा प्रचण्ड सबैलाई स्वीकार्य हुने हुनाले भण्डारीको अध्यक्षतामा एकीकृत नेकपा बनाउने ।

जब त्यो खबर ओलीलाई चीनबाट सुनाइयो । ओलीले चीन गएको टोली नफर्किँदै असार १७ गते मध्यराती नेपाली काँग्रेसका सभापति शेरबहादुर देउवासँग नयाँ गठबन्धन बनाउन सम्झौता गरे ।

तत्कालीन प्रधानमन्त्री पुष्पकमल दाहालको कन्फिडेन्सको कारण पनि चीनको एकीकृत नेकपा ब्युँताउने योजना थियो । यता दक्षिण आफूसँग कम्फर्टेबल नै थियो भने उता उत्तरले एकीकृत नेकपा ब्युउँताउन मद्दत गर्दै थियो । त्यसैले दाहाल ढुक्क थिए । तर, ओलीलाई विद्या भण्डारीको नेतृत्वको एकीकृत नेकपामात्र होइन प्रचण्ड र माधव नेपाल पनि स्विकार्य थिएन ।

यसले पूर्व राष्ट्रपति विद्या देवी भण्डारीको र ओलीको सम्बन्ध बिग्रेन त ? नेकपा एमालेका एक नेता पूर्व राष्ट्रपति विद्या देवी भण्डारीको र ओलीको सम्बन्ध नबिग्रेको दाबी गर्छन् ।

तर राजनीतिमा सम्बन्धभन्दा सत्ता ठूलो हुन्छ । जे होस् चौथो पटक ओली संसदमा फेरि करिब दुई तिहाइको बहुमतसहित प्रधानमन्त्री बन्दै गर्दा नेपाली नागरिकमाथि एकपटक फेरि बोइलिङ फ्रग एक्सपेरिमेन्ट नै भएको हो वा ओली सुध्रिएका हुन् । 

थाहा पाउन धेरै कुर्न पर्दैन !

(published first time: https://clickmandu.com/2024/07/328942.html)

Developing countries pay record $443.5 billion on public debt

Amid the biggest surge in global interest rates in four decades, developing countries spent a record $443.5 billion to service their external public and publicly guaranteed debt in 2022, the World Bank’s latest International Debt Report shows.

The increase in costs shifted scarce resources away from critical needs such as health, education, and the environment. "Debt-service payments—which include principal and interest—increased by five per cent over the previous year for all developing countries," the report reads, adding that the 75 countries eligible to borrow from the World Bank’s International Development Association (IDA) — which supports the poorest countries—paid a record $88.9 billion in debt-servicing costs in 2022. "Over the past decade, interest payments by these countries have quadrupled, to an all-time high of $23.6 billion in 2022."

"Overall debt-servicing costs for the 24 poorest countries are expected to balloon in 2023 and 2024—by as much as 39 per cent," the report finds.

“Record debt levels and high interest rates have set many countries on a path to crisis,” said the World Bank Group’s chief economist and senior vice president Indermit Gill. "Every quarter that interest rates stay high results in more developing countries becoming distressed—and facing the difficult choice of servicing their public debts or investing in public health, education, and infrastructure," he said, adding that the situation warrants quick and coordinated action by debtor governments, private and official creditors, and multilateral financial institutions—more transparency, better debt sustainability tools, and swifter restructuring arrangements. "The alternative is another lost decade."

Surging interest rates have intensified debt vulnerabilities in all developing countries. In the past three years alone, there have been 18 sovereign defaults in 10 developing countries—greater than the number recorded in all of the previous two decades. Today, about 60 per cent of low-income countries are at high risk of debt distress or already in it.

Interest payments consume an increasingly large share of low-income countries’ export, the report finds. More than a third of their external debt, moreover, involves variable interest rates that could rise suddenly. Many of these countries face an additional burden: the accumulated principal, interest, and fees they incurred for the privilege of debt-service suspension under the G-20’s Debt Service Suspension Initiative (DSSI). The stronger US dollar is adding to their difficulties, making it even more expensive for countries to make payments. Under the circumstances, a further rise in interest rates or a sharp drop in export earnings could push them over the edge.

As debt-servicing costs have climbed, new financing options for developing countries have dwindled. In 2022, new external loan commitments to public and publicly guaranteed entities in these countries dropped by 23 per cent to $371 billion—the lowest level in a decade. Private creditors largely abstained from developing countries, receiving $185 billion more in principal repayments than they disbursed in loans.

That marked the first time since 2015 that private creditors have received more funds than they put into developing countries. New bonds issued by all developing countries in international markets dropped by more than half from 2021 to 2022, and issuances by low-income countries fell by more than three-quarters. New bond issuance by IDA-eligible countries fell by more than three-quarters to US$3.1 billion.

With financing from private creditors drying up, the World Bank and other multilateral development banks stepped in to help close the gap. Multilateral creditors provided $115 billion in new low-cost financing for developing countries in 2022, nearly half of which came from the World Bank. Through IDA, the World Bank provided $16.9 billion more in new financing for these countries than it received in principal repayments—nearly three times the comparable number a decade ago. In addition, the World Bank disbursed $6.1 billion in grants to these countries, three times the amount in 2012.

The latest International Debt Report marks the publication’s 50th anniversary. It highlights key insights from the World Bank’s International Debt Statistics database—the most comprehensive and transparent source of external debt data of developing countries. The new edition also features an expanded analytical framework, one that goes beyond the latest data to examine near-term outlook for debt as well. It also includes an overview of the Bank’s debt-related activities and an analysis of emerging trends in debt management and transparency.

“Knowing what a country owes and to whom is essential for better debt management and sustainability,” said Haishan Fu, Chief Statistician of the World Bank and Director of the World Bank’s Development Data Group. “The first step in avoiding a crisis is having a clear picture of the challenge. And when problems arise, clear data can guide debt restructuring efforts to get a country back on track towards economic stability and growth. Debt transparency is the key to sustainable public borrowing and accountable, rules-based lending practices which are so vital to ending poverty on a livable planet.”

The report notes that IDA-eligible countries have spent the last decade adding to their debt at a pace that exceeds their economic growth—a red flag for their prospects in the coming years. In 2022, the combined external debt stock of IDA-eligible countries hit a record $1.1 trillion—more than double the 2012 level. From 2012 through 2022, IDA-eligible countries increased their external debt by 134 per cent, outstripping the 53 per cent increase they achieved in their gross national income (GNI).

Public debt doubles in five years

 The public debt has been doubled in the last five years, coinciding with the first tenure after Nepal became a federal republic.

The significant increase has been recorded since the 2017 elections, when the full-fledged federal government came to power, with seven provincial and 753 local governments. However, the federalism has little contribution in whooping increase in public debt compared to lack of good governance and fiscal discipline.

According to Public Debt Management Office, the ratio of public debt to GDP is 41.38 per cent. "The ratio of external debt to total GDP is 21.64 per cent, whereas the ratio of internal debt to total GDP is 19.73 per cent."

Nepal's GDP is currently valued at Rs 4,851 billion, according to the Central Bureau of Statistics (CBS).

In the fiscal year 2017-2018, Nepal had around Rs 917 billion public debt. But the amount has steadily increased to Rs 1,048 billion in 2018-19; Rs 1,433 billion in 2019-20; Rs 1,737 billion in 2020-21, and finally reaching to Rs 2,013 billion in the last fiscal year 2021-22, according to the Public Debt Management Office data.

As of the first quarter of the current fiscal year 2022-23, the country’s public debt totals to Rs 2,007.84 billion.

Among, the public debt, the external and domestic debt are almost equal.

The external debt stands at Rs 1,050.23 billion, while domestic debt is at Rs 957.61 billion, according to the data.

The debt, however, decreased by 0.27 per cent as of mid-October, compared to the Rs 2,013.29 billion recorded in mid-June. "The external debt increased by Rs 24.38 billion during the first quarter of the current fiscal year, whereas domestic debt decreased by Rs 29.83 billion," the data revealed.

The government has received Rs 24.70 billion in debt from development partners, in the first three months of the current fiscal year. However, it has not mobilised domestic debt yet, but preparing.

The government has cleared a total of Rs 5.84 billion (approximately $51 million) external loans in the first quarter of the current fiscal year 2022-23. But the liability of foreign loans increased by Rs 5.52 billion due to depreciation of Nepali currency against the US dollar, according to the office.

Top 10 Creditors

International Development Association (IDA) -- Rs 526.18 billion

Asian Development Bank (ADB) -- Rs 323.64 billion

Japan International Cooperation Agency (JICA) -- Rs 48.41 billion

International Monetary Fund (IMF) -- Rs 43.89 billion

EXIM Bank Line of Credit-India -- Rs 37.56 billion

Exim Bank of China -- Rs 33.51 billion

International Fund for Agricultural Development -- Rs 10.25 billion

OPEC Fund for International Development -- Rs 8.38 billion

Exim Bank, Korea -- Rs 5.62 billion

European Investment Bank (EIB) -- Rs 5.61 billion

Low-income country debt rises to record $860 billion

Governments around the world responded to the Covid-19 pandemic with massive fiscal, monetary, and financial stimulus packages. While these measures were aimed at addressing the health emergency, cushioning the impact of the pandemic on the poor and vulnerable and putting countries on a path to recovery, the resulting debt burden of the world’s low-income countries rose by 12 per cent  to a record $860 billion in 2020, according to a new World Bank report.

Even prior to the pandemic, many low- and middle-income countries were in a vulnerable position, with slowing economic growth and public and external debt at elevated levels. External debt stocks of low- and middle-income countries combined rose by 5.3 per cent in 2020 to $8.7 trillion, according to the new International Debt Statistics 2022 report, which encompasses approach to managing debt is needed to help low- and middle-income countries assess and curtail risks and achieve sustainable debt levels.

"We need a comprehensive approach to the debt problem, including debt reduction, swifter restructuring and improved transparency," World Bank Group president David Malpass said, adding that sustainable debt levels are vital for economic recovery and poverty reduction.

The deterioration in debt indicators was widespread and impacted countries in all regions, it reads, adding that across all low- and middle-income countries, the rise in external indebtedness outpaced Gross National Income (GNI) and export growth. "Low- and middle-income countries’ external debt-to-GNI ratio (excluding China) rose to 42 per cent in 2020 from 37 per cent in 2019 while their debt-to-export ratio increased to 154 per cent in 2020 from 126 per cent in 2019."

In response to the unprecedented challenges posed by the pandemic and at the urging of the World Bank Group and the International Monetary Fund (IMF), in April 2020, the G20 launched the Debt Service Suspension Initiative (DSSI) to provide temporary liquidity support for low-income countries. The G-20 countries agreed to extend the deferral period through the end of 2021. In November 2020, the G20 agreed on a Common Framework for Debt Treatments beyond the DSSI, an initiative to restructure unsustainable debt situations and protracted financing gaps in DSSI-eligible countries.

Overall, in 2020, net inflows from multilateral creditors to low- and middle-income countries rose to $117 billion, the highest level in a decade. Net debt inflows of external public debt to low-income countries rose by 25 per cent to $71 billion, also the highest level in a decade. Multilateral creditors, including the IMF, provided $42 billion in net inflows while bilateral creditors accounted for an additional $10 billion.

"Economies across the globe face a daunting challenge posed by high and rapidly rising debt levels,” senior vice president and chief economist of the World Bank Group Carmen Reinhart said, adding that policymakers need to prepare for the possibility of debt distress when financial market conditions turn less benign, particularly in emerging market and developing economies.

Greater debt transparency is critical in addressing the risks posed by rising debt in many developing countries. To facilitate transparency, International Debt Statistics 2022 was expanded to provide more detailed and disaggregated data on external debt than ever before. The data now gives the breakdown of a borrowing country’s external debt stock to show the amount owed to each official and private creditor, the currency composition of this debt, and the terms on which loans were extended, according to the World Bank. "For DSSI-eligible countries the dataset was expanded to include the debt service deferred in 2020 by each bilateral creditor and the projected month-by-month debt-service payments owed to them through 2021."

International Debt Statistics (IDS) is a longstanding annual publication of the World Bank featuring external debt statistics and analysis for the 123 low- and middle-income countries that report to the World Bank Debt Reporting System (DRS).

Since the start of the Covid-19 pandemic, the World Bank Group has deployed over $157 billion to fight the health, economic, and social impacts of the pandemic, the fastest and largest crisis response in its history. The financing is helping more than 100 countries strengthen pandemic preparedness, protect the poor and jobs, and jump start a climate-friendly recovery. The bank is also supporting over 50 low- and middle-income countries, more than half of which are in Africa, with the purchase and deployment of Covid-19 vaccines, and is making available $20 billion in financing for this purpose until the end of 2022.

Debt burden of LDCs continues to climb to a record $744 billion

 In response to an urgent need for greater debt transparency, the latest edition of the International Debt Statistics (IDS) report provides more detailed and more disaggregated data on external debt than ever before in its nearly 70-year history, including breakdowns of what each borrowing country owes to official and private creditors in each creditor country, and the expected month-by-month debt-service payments owed to them through 2021.

Before the onset of the Covid-19 pandemic, rising public debt levels were already a cause for concern, particularly in many of the world’s poorest countries as discussed in our Four Waves of Debt report published in December 2019. Responding to a call from the World Bank (WB) and the International Monetary Fund (IMF), the G20 endorsed the Debt Service Suspension Initiative (DSSI) in April 2020 to help up to 73 of the poorest countries manage the impact of the Covid-19 pandemic.

According to the 2021 IDS report the total external debt of DSSI-eligible countries climbed 9.5 per cent to a record $744 billion in 2019 from the previous year highlighting an urgent need for creditors and borrowers alike to collaborate to stave off the growing risk of sovereign-debt crises triggered by the Covid-19 pandemic. The pace of debt accumulation for these countries was nearly twice the rate of other low- and middle-income countries in 2019.

UN Agency proposes global debt deal

The UN trade and development body today set out urgent measures needed to head off a looming debt disaster in developing countries reeling from the economic fallout from the coronavirus pandemic.
UNCTAD released a report that calls for a global debt deal for the developing world. It underlines the vital need for decisive action to provide substantive debt relief to developing countries to free up sorely needed resources to respond to the raging pandemic.
On March 30, UNCTAD called for a $2.5 trillion coronavirus crisis package for developing countries. Even prior to the Covid-19 crisis, many of these countries faced high and rising shares of their government revenues going to debt repayments, squeezing health and social expenditures. “The international community should urgently take more steps to relieve the mounting financial pressure that debt payments are exerting on developing countries as they get to grips with the economic shock of Covid-19,” said UNCTAD secretary-general Mukhisa Kituyi.
The coronavirus pandemic hits developing economies at a time when they had already been struggling with unsustainable debt burdens for many years, as well as with rising health and economic needs.
According to the report, developing countries now face a wall of debt service repayments throughout the 2020s. In 2020 and 2021 alone, repayments on their public external debt are estimated at nearly $3.4 trillion – between $2 trillion and $2.3 trillion in high-income developing countries and between $666 billion and $1.06 trillion in middle- and low-income countries.
The financial turmoil from the crisis has triggered record portfolio capital outflows from emerging economies and sharp currency devaluations in developing countries, making servicing their debts more onerous. “Recent calls for international solidarity point in the right direction,” said director of UNCTAD’s globalisation division, Richard Kozul-Wright, who produced the report, “but have so far delivered little tangible support for developing countries as they tackle the immediate impacts of the pandemic and its economic repercussions.”
UNCTAD outlines three key steps to translate the calls into action:
Step 1: Automatic temporary standstills: Such standstills would provide macroeconomic ‘breathing space’ for all crisis-stricken developing countries requesting forbearance to free up resources, normally dedicated to servicing external sovereign debt. The standstills, if long and comprehensive enough, would facilitate an effective response to the Covid-19 shock through increased health and social expenditure in the immediate future and allow for post-crisis economic recovery along sustainable growth, fiscal and trade balance trajectories.
Step 2: Debt relief and restructuring programmes : The programmes would ensure the ‘breathing space’ gained under the first step is used to reassess longer-term developing country debt sustainability, on a case-by-case basis.
On April 13, the IMF cancelled debt repayments due to it by the 25 poorest developing economies for the next six months. This debt cancellation is estimated at around $215 million.
On 15 April, leaders of the Group of 20 leading economies (G20) announced the suspension of debt service payments for 73 of the poorest countries from May to the end of this year.
However, more systematic, transparent and coordinated measures towards writing off developing country debt across the board are urgently needed, the report says, suggesting that a trillion dollar write-off would be closer to the figure needed to prevent economic disaster across the developing world.
Step 3: An international developing country debt authority : To take the first two steps forward, the UNCTAD report proposes the establishment of an International Developing Country Debt Authority (IDCDA) to oversee their implementation and lay the institutional and regulatory foundations for a more permanent international framework to guide sovereign debt restructurings in future.
This could follow the path of setting up an autonomous international organisation by way of an international treaty between concerned states. Essential to any such international agreement would be the swift establishment of an advisory body of experts with entire independence of any creditor or debtor interests.

Nepal to get IMF debt relief

Nepal is going to receive debt relief from the International Monetary Fund (IMF) for six months as part of its response to help address the impact of the Covid-19 pandemic.
The global monetary advisor announced the debt service relief for the 25 countries – including Nepal, Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, DR, The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen – today under its revamped Catastrophe Containment and Relief Trust. “As of December 2019, Nepal’s outstanding loans to be paid to the international institutions stands at SDR 38.5 million ($52.36 million),” according to the fund's website.
The SDR (Special Drawing Rights) are the units of account, which is like currency and pegged with a basket of important foreign currencies like the US dollar, euro, Chinese yuan and Japanese yen. One SDR is equivalent to $1.36.
Nepal had received loans from the fund after the devastating earthquake in April 2015. “Debt relief for six months means Nepal need not pay installment – including principal and interest – for six months.
The government had however requested IMF to provide debt relief for two years.
During a video conference with senior officials of multilateral development partners including IMF, the World Bank (WB), Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB), finance minister Dr Yuba Raj Khatiwada had asked for a deferral of the loan repayment schedule and debt relief from development partners, though Nepal has forex reserve that can pay for the import of goods and services for 8 months.
The IMF provides grants to its poorest and most vulnerable members to cover their debt obligations for an initial phase over the next six months, under the scheme.
“This will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts,” managing director of the IMF Kristalina Georgieva said, adding that the Catastrophe Containment and Relief Trust can currently provide about $500 million in grant-based debt service relief, including the recent $185 million pledge by the UK and $100 million provided by Japan as immediately available resources.
“Others, including China and the Netherlands, are also stepping forward with important contributions,” the press note issued by the IMF reads.
Georgieva has also urged the development partners to help it replenish the Trust’s resources and boost further its ability to provide additional debt service relief for a full two years to its poorest member countries.

Central bank fixes debt service to gross income ratio at 50 per cent

The central bank has fixed the debt service to gross income ratio for individual borrowers for non-commercial loans.
Issuing a circular today to the banks and financial institutions (BFIs), the central bank has fixed 50 per cent of debt service to gross income ratio for personal loans, housing loans and hire purchase loans.
According to the circular, the BFIs must now factor in regular income of borrowers, while floating personal-type loans, housing loans and hire purchase loans. “A BFI will have to float loan amount within a limit that does not exceed the borrower's 50 per cent of gross income for non-commercial loans like personal loans, hire purchase financing and home loans.”
Though BFIs also consider the income source of their borrowers to ascertain repayment capacity while processing loan applications, the value and quality of collateral has been the major factor that forms the basis of loan disbursement decision. But the new rule will bars banking institution to float loans whose repayment installment amount is higher than the borrower's 50 per cent gross income, according to the bankers. “The borrowers, who want to buy home or car from loan must have to present their certificate of income along with tax clearance certificate to the BFIs,” the bankers said, adding that a borrower must have a gross salary of Rs 50,000 per month, otherwise the one will not be able to get home loan with monthly installment of more than Rs 25,000 per month, irrespective of the value of the collateral. Though, the banks have their own rule while considering the regular income for such loans, the central bank’s new move made them to fix the maximum ratio will restrict them to float loans whose installment does not cross the limit. The central bank circular reads that if any bank floats loans higher than the ratio, it must classify such loan as loans under 'watch list' and must provision 5 per cent of such loan as losses.
As of mid-November, the BFIs have floated Rs 248.4 billion residential personal home loans – up to Rs 15 million each – and Rs 182.94 billion hire purchase loans, according to the central bank data.

Debt trap warnings over BRI projects motivated by bias: FM Gyawali

Foreign minister today dismissed the notion that Nepal could fall into a Chinese debt trap, if it chose to be part of the Belt and Road Initiatives (BRI).
The argument that Nepal could fall into a Chinese debt trap, if it chose to take loans under the BRI is motivated by bias," said foreign minister Pradeep Kumar Gyawali, addressing a press meet today.
There are some concerns from various quarters that BRI loans could possibly push Nepal into a serious debt trap like some of the countries in the world. "Nepal is aware what it should do and what it should not do in its national interests," he said, adding that Nepal is free to decide on its development initiatives. "Nepal will decide independently on Chinese loans and the selection of projects under BRI."
Arguing that Chinese debt was not behind the serious economic crises in many Latin American countries including in Argentina back in the 1990s and 2000s, he said that they were not under the Chinese debt trap. "Greece is still struggling with a serious economic crisis and many other countries have also fallen into debt traps,” he added.
He also explained that there is no rule that a country will fall into a debt trap through taking loans from any particular country and not fall into it when taking loans from another country. "The issue is whether Nepal selects a project on the basis of possible returns and what is the pay back plan," he added, though his government's selection of projects till date – since it came to the power with almost two-third majority – has not seen any suitable and economically viable projects.
Since Nepal is currently holding discussions with China on the projects to be incorporated into BRI, there are a couple of projects under consideration.
Gyawali also said that Nepal and China will sign the protocol of the Nepal-China Transit Transport Agreement during visit of President Bidya Devi Bhandari beginning from tomorrow. The protocol paves the way for the implementation of the agreement and allows Nepal third country transit facilities via Chinese ports. The first state level visit of a head of the state since the establishment of a federal republic is expected to connect Nepal's development endeavors with Chinese development success through the signing of protocol in the presence of the heads of the states.
Secretary at the Ministry of Industry, Commerce and Supplies Kedar Bahadur Adhikari will sign the protocol with his Chinese counterpart during the forum in the presence of President Bhandari. Though the protocol is said to allow more flexible terms for trade and transit – compared to India – and might be feasible for trading with South East Asian countries also, the cost of doing business through the new route is yet to be calculated.
The agreement allows open utilisation of either inland waterways or roads for transit and transport to sea ports for third country trade.
Nepal signed the Transit Transport Agreement with China in 2016 after trade blockade by India.
Likewise, President Bhandari is scheduled to take part in a roundtable to be hosted by her Chinese counterpart Xi Jinping and hold bilateral talks with Xi on April 29. Transport minister Raghubir Mahaseth will deliver a speech on 'Infrastructure and Connectivity' during the forum.

Per capita debt of Nepalis surges to Rs 31,750

Per capita debt of Nepalis has increased by Rs 7,043 in the fiscal year 2017-18 to Rs 31,750.
According to the Office of Auditor General's report, the debt burden of a Nepali citizen has gone up to Rs 31,750 from Rs 24,707 in the last fiscal year. "The total debt of the government was Rs 915.31 billion till 2017-18, an increase from Rs 217.62 billion."
Of the total debt, the internal debt and the external debt of the government stands at Rs 391.16 billion and Rs 524.15 billion, respectively. However the increasing debt in not as bad as it is claimed to be due to  low spending capacity and return on the debt that could have created employment and helped capital formation.

BRI to help Nepal: Finance Minister

Nepal can take advantage from China's Belt and Road Initiative (BRI), according to a minister.
"Nepal should not be skeptic of China's Belt and Road Initiative (BRI) as it could create a win-win situation for all the nations involved," said finance minister Dr Yuba Raj Khatiwada, inaugurating the third international conference on BRI organised by Nepal-China Friendship Forum here today.
He also claimed that the debts under the initiatives are sustainable and will come handy to Nepal at a time when the investments in infrastructures are set to decrease. "With more investments needed for social security, we are set to see a decrease in investments in infrastructures,” he said, adding that the Chinese loan will be of good help for Nepal.
All the nations under the initiative should come together in planning, working and sharing the benefits of the initiative to make sure that it becomes a success, though there is a widespread critisism of BRI, which is claimed to push a nation into a 'debt trap'.
Chinese ambassador to Nepal Yu Hong, on the occasion, said that BRI is not a debt trap for the South Asian developing nations. He also claimed that the initiative aims at creating a win-win situation for all the parties involved. "There are enough evidences which support the fact that the initiative can produce positive result," she said, adding that the international community is divided over the initiative with some nations terming the initiative as a 'Chinese debt trap'. Most of the critics have claimed the loans granted by China will create problems for the developing nations.
Citing the example of Sri Lanka which only owes 10 per cent of its foreign loans to China, the envoy said that China offers loan with interest rates, lower than those in the global market. "How can the loans be a problem,” she asked adding that it is high time that China and South Asian countries worked together for the initiative.
The two-day conference is engaging various international experts, who will come together in deliberations, sharing of experience, knowledge and expertise on various topics relating to BRI.

Debt Sustainability Framework for Low Income Countries review

The executive board of the International Monetary Fund (IMF) today reviewed the joint IMF-World Bank Debt Sustainability Framework for Low-Income Countries (LIC-DSF).
Since its introduction in 2005, the LIC-DSF has been the cornerstone of the international community’s assessment of risks to debt sustainability in LICs, with important operational implications for stakeholders. The DSF has been playing a critical role in guiding borrowing and lending decisions; multilateral lenders including the International Development Association have linked their lending policies to the DSF results and the risk assessment derived by the DSF has informed the IMF’s debt limits policy (DLP) and the World Bank’s non-concessional borrowing policy (NCBP).
The framework was previously reviewed in 2006, 2009, and 2012. While the 2012 review added several new features, notably incorporation of more country-specific information and greater attention to domestic debt vulnerabilities, executive directors saw room for further progress, including by improving the assessment of macro-linkages in stress tests and exploring more the links between investment and growth – areas which were left for future work.
In the extensive consultations surrounding the current review, stakeholders emphasised the importance of ensuring that the DSF remains balanced in its treatment of risks and borrowing opportunities, incorporates more country-specific information, and reflects the evolving financing landscape facing LICs, including risks emanating from LICs’ increased market financing and contingent liabilities.
The current review assesses the DSF’s performance in recent years and proposes a wide-ranging set of reforms that adapts the framework to the evolving circumstances facing LICs and makes it more comprehensive and transparent, and yet simpler to use. The changes will include a revised approach to the assessment of countries’ debt carrying capacity based on an expanded set of variables; adjustments to the methodology designed to improve the framework’s accuracy in predicting debt distress; new tools prepared to help shed light on the plausibility of underlying macroeconomic projections; tailored stress tests to help better evaluate specific risks of particular relevance for some countries; and a reduction in the number of debt thresholds and standardised stress tests.   
The framework is expected to become operational in the second half of 2018. It will allow for completion of the associated Guidance Note and template, followed by an extensive six-month program of training for country-level authorities.
The executive directors welcomed the comprehensive review of the Debt Sustainability Framework for Low-Income Countries (LIC-DSF) and appreciated the extensive consultations with country authorities, the executive board, and external stakeholders. They noted that the LIC-DSF is a vital tool for country authorities to help strengthen fiscal policy and debt management and this review has highlighted areas where the framework can be reformed. Directors, on the occasion, agreed that the proposed reforms would make the framework more comprehensive and transparent and that the revised LIC-DSF would continue to play a critical role in informing borrowing and lending decisions by more accurately flagging potential debt distress with the aim of avoiding unnecessarily constraining LICs’ ability to finance their development.
Directors welcomed the proposed composite measure to assess a country’s debt-carrying capacity, based on both the CPIA and a set of macroeconomic variables. They observed that the inclusion of macroeconomic variables takes better account of country-specific features, and enables a fuller understanding of, and policy discussions on, how economic policies affect debt carrying capacity. This, in turn, will enhance the contribution of the DSF to policy formulation.
Directors endorsed the proposed new thresholds for debt stock and debt service indicators. They noted that, for countries whose assessment of debt-carrying capacity remains unchanged, the revised framework may imply additional borrowing space, provided countries manage debt service well. Directors observed that the quality of the framework’s outputs depend heavily on the quality of the inputs.
Directors agreed that adding tailored scenario stress tests will help evaluate risks of particular importance for some member countries – including those emanating from natural disasters, volatile export prices, market-financing shocks, and contingent liability exposures. They called for clear disclosure in debt sustainability analyses of the key assumptions made in calibrating these tests.