 Welcome everybody to this wider session on sovereign debt and we have an excellent team of speakers today. Our panel is going to consist of Mack Mood Mahildin. Mack Mood is the UN Special Envoy on Financing the 2030 Agenda and he is an IMF Executive Director for the Arab countries. Among his past appointments were Egypt's Minister of Investment and World Bank Senior Vice President as well as being a Professor at Cairo University and then we will be having Maureen Ware as our second speaker. She's a Senior Economist in the Research Department of the Central Bank of Kenya, formerly with WIDA working closely with the Wungosi Institute in Tanzania and she was previously with the Kenya Institute for Public Policy Research and Analysis and then our third speaker will be David Mahali who is Senior Economic Analyst at the Natural Resources Growth Institute and he is also currently a researcher at the University of Keele's Economics Department. David works particularly on issues of international debt and natural resources. I am Tony Addison, Professor of Development Economics at the University of Copenhagen and a non-resident Senior Research Fellow of UNU, WIDA. The session will proceed with all of our speakers speaking and then we will have if we have any time left a Q&A but the Q&A will be simply you put your questions into the Q&A tab on the right hand side of your screen and if there is time then we can try and have the speakers answer the questions. So I'm going to begin with MacMood. We're going to show a short video from MacMood of his presentation and then he's going to come in for a couple of additional points and then we're going to proceed to Maureen and then to David. Okay so thank you for your patience with all the technology this morning. Thank you. Thank you so much Tony and Wider for the kind invitation to share with you some thoughts on one of the most critical challenges facing our world today including of course the developing economies and emerging markets that is debt and sovereign debt and how to manage it better to avoid a debt crisis. Before I talk about debt specifically I'd just like to mention that for many years the world had been seeing a good era of great moderation and conversions. By great moderation it was meant by great moderation we mean a period of economic stability, low inflation and inclusive growth. Unfortunately that period that started from the 1980s ended by the global financial crisis in 2007 but the the conversions between developing economies and the advanced economies continued until the shock that we are facing all today because of Covid. So now we are facing a period of great diversions and we hope to be a very short period and resume convergence again because if we are going to be seeing a discrepancy of income and growth between advanced economies and developing economies and emerging markets this can create a variety of tensions, a vicious cycle in terms of poverty, hunger, inequality and human fragility and this could result in enforced migration as well. So if I talk about debt then as shown in the next slide that's been put in a context with the increase of the number of cases affected by Covid. I think the figures available today show us around 218 million cases of Covid. We know from some updates from the World Bank and other institutions that this crisis and the implications of the health crisis on economic activities and the lives and livelihoods had a social economic impact including the increase of the number of those who are suffering from extreme poverty and increased by roughly 120 million people suffering from extreme poverty and 8 out of 10 of the world's new poor are located in middle income countries. It is not just income poverty, there are challenges facing us when it comes to education or learning poverty. It is estimated that an additional 101 million children and youth from grades 1 to 8 fell from the minimum reading professional level due to Covid-19 in 2020. This may have wiped out the education gains achieved over the last 20 years. In addition to that, based on figures we got from the World Food Programme that the number of those suffering from acute hunger had doubled to 265 million people around the world, mainly in low income and fragile and post-conflict countries. As it is shown in this slide, every major macroeconomic indicator had seen major deterioration in the year 2020, drops in employment. Either you get the figures from the ILO or the IMF, you can really see a huge increase in unemployment and job losses in advanced economies, in developing economies and emerging markets. Some countries of course had the capacity to deal with the challenges through social protection schemes but that was not available in the low income and middle income countries. We saw the deterioration of the trade. Indeed, trade performed better than what was expected but still dropped by more than 5% last year with a major drop in the private sector investments across borders last year as well, without really showing signs of recovery for this year. The trade may have shown some signs of recovery but FDI isn't really showing that there. Again, on the issue of growth, yes this year is much better than last year that saw a drop of economic activities by 3.2%. Growth this year is going to be positive 6%, but as I said earlier, it's going to be very much reflecting diversions because of the unevenness in the growth path between different countries. In the next slide then, let's get into the business of sharing what's happening in the debt front. Actually before, we can't blame it all on COVID-19 because even before COVID, by the beginning of the year 2020, there were lots of discussions about the fourth wave of accumulation of debt in advanced economies and in developing economies and commercial markets, increase of debts by governments, by the business sector, even by the household sector. We know from history that the three previous waves of accumulation of debt, each and every one of them ended unfortunately with a crisis. We saw that after the Latin American debt accumulation ended with a crisis, same happened with Asian crisis and of course the global financial crisis of 2007-2008. What we hope that the debt accumulation that we are seeing currently is going to be ending differently by not having a crisis. Yes, there is debt accumulation, but so far we haven't seen a crisis as such. We are trying to prevent a crisis from happening. I'm talking globally. Of course, some individual countries are suffering from debt distress and suffering from debt crisis, but it's not global and even within groups of countries, still so far within particular countries that we can really help them dealing with the crisis and help ourselves not to see a widespread debt crisis. From the lessons of history, we saw that crisis triggered by shocks, resulted in the increasing of investor risk aversion, high-risk premium, high-risk borrowing costs, sudden stops of capital inflows, or exposure to deep recession. The difference between the waves are basically difference in the financial instruments that were responsible, were involved in the debt difficulty and then the debt prices. Then we are seeing a growing share of the private sector and severity of damage. Then the issue that I like to emphasize, that build-up supported unsustainable policy like import substitution strategies, undiversified economies, insufficient sector that didn't raise export earnings or had poor corporate governance. What we are trying really to see in the efforts today, as I'll be showing you in the next slide and the slide after. Yes, this slide again is confirming this kind of huge accumulation of debt during the last three or four years, including the year before COVID and to reach today that around 289 trillion or more than 365% of the global GDP. In terms of the debt service, as a share of revenue, you can see that in the median of selected countries, developing Glees developed on a small island, developing states. You can really see that the countries that are suffering the most from debt service challenges are small island developing states were exposed more than others because of the many of them dependence on tourism, the services sector and heavy concentration on one or two commodities as exports. And then of course, you see the challenges in the rest of the developing countries. Advanced economies managed today with their fiscal space with very low interest rates to finance their debt obligations easier than the developing economies. Although that may be seeing some sort of a phasing out with the end of the quantitative easing as we have been following the recent debates during Jackson Hole, but the impact is going to be felt more on the developing economies because they will be exposed to the following. Now we see the higher borrowing costs. There is the issue of inflation and whether the debate in advanced economies is it a transitory kind of inflation or not? The case of many developing economies, they feel that right away and it's going to be beyond transitory is going to be staying there because of the impact of imported goods and material in addition to some structural issues as well. So we get that kind of a story then slower growth in many of these developing economies exposure to higher borrowing costs and impact of inflation. In addition to the possibility of shifts in the capital flows towards the advanced economies. In addition to the fact that you will be seeing some shifts in capital flows because of the increases in interest rates in advanced economies and that will have implications as well on exchange rates. So developing problems and emerging markets are in need today to be an alert and take the necessary measures to contain the implications of these dynamics. In the next slide, I'm trying to say here that developing economies in a local and culturally affects the problems of these needs some international operation. We saw the UN initiative on financing development in the year of COVID-19 and beyond the initiative led by the Secretary General and the Prime Ministers of Canada and Jamaica and an important initiative covering different aspects related to debt management, to debt vulnerability issues, matters related to debt liquidity and matters related to liquidity. In addition to some measures to improve response and recovery on building back better or building forward better including emphasis on investments for inclusive growth and sustainability and dealing with the leakage as well in the global financial system by preventing illicit financial flows. This was basically the quick summary of the initiative of the Secretary General and the Canada and Jamaica and many of the recommendations have been put into consideration and we have seen as well some good work or initiatives by the G20 including the DSSI which is corresponding to the debt service moratorium or debt service suspension initiative by the Secretary General of the UN. Unfortunately the DSSI as we all know is going to have an end in December 2021 and we need to think how to help these developing economies in the time that we are seeing these kind of challenges facing them. The IMF is doing as well some good work through the catastrophe containment and relief trust fund including availing grants for debt relief for 28 countries. I think they got something like $238 million. There was as well this historic milestone of the release of the general SDR allocation of $650 million. But as you can see from the next slide here that the SDRs in terms of their allocation because they are quota based, each country get 95% of its quota so you end up seeing some countries getting much more than the continent of Africa for instance. Of course as we know advanced economies are getting the bigger share here and I just got some examples here from the US and the rest of the G7 and you add to them China. You can really see the average there in these countries is much bigger than what the whole continent of Africa is getting about $38 billion while Japan is getting $41 billion. This gives a good room for re-channeling the SDRs. For all of these countries the advanced economies that are not going to be making use of their SDRs they can re-annocate them or re-channel them for the benefit of developing economies and emerging markets and of course there is the poverty reduction and growth trust fund of the IMF that could really get many countries help and support but of course countries need to be with a program to benefit from that with the IMF and there is a capacity for such fund as well. That's why there is some thinking today at the IMF to create a new fund resilience and sustainability trust fund that could really be helpful and supportive for countries in the response on recovery with emphasis on dreaming the recovery on making the recovery inclusive and to deal with the immediate needs for vaccination. So as we can see really if we can summarize all of these initiatives and that they are necessary but not sufficient and as mentioned by the managing director of the IMF even the unprecedented issuance of the SDR you can consider it very important but not a panacea and again on this slide that in front of you if you are putting matters again in the context of achieving the SDGs and before the crisis we were facing a gap of 2.53 million a year to fund the SDGs and to make sure that countries can achieve them by 2030 investments in education and health infrastructure which takes the bulk of the investments required for sustainability in addition to huge requirements for climate change. You add to that 1 trillion because of the addition needs because of COVID and another 700 billion which was a drop in private sector financial development economies. So now we ended with such a huge gap 4.2 trillion in addition to what I just mentioned now about the issues related to that. So we can really see from the global perspective we need to do more in order to first to prevent the crisis because that will make this gap even wider than what it is today. We have assets in the system the global financial system have assets under management today which exceed 110 trillion dollars based on some recent updates by PWC on that but and this is accumulated and you can see the share of different regions of such assets. How much of that going to the SDGs investments efforts investment human capital infrastructure and resilience is a fraction of that and what's left is basically what we see here in gaps of funding. So that gets me into the final slide which again a reminder of the of the importance of discussing finance including that management in the context of achieving the SDGs. We are at the still at the beginning of the decade of action the last 10 years before we reached the finish line in 2030 and we need to do more in order to achieve the SDGs how to integrate sustainability in the global and country level financing. How many countries today a valid question have an SDG based budget? How the public sector and private sector can work better together in order to achieve the SDGs? What are the scope are room for more effective partnerships between the public and the private sector and local communities? The second point is basically about aligning the recovery efforts with targeted investments in social protection systems with efforts to secure just transition. Regardless our efforts today because of the challenges we are facing the climate challenge the issues with vaccine and health all of that require investments in social protection and supporting our systems in the case of failure of achieving the required targets. We need to have huge investments in the safety net and in social protection. A third point is putting that management and reform of the international debt architecture firmly back on the agenda and we hope in the remaining important meetings in this calendar year including the meetings for G20 before that the meetings during PANGA the General Assembly of the UN and after that the annual meetings of the fund and the bank that issues related to debt management and debt prevention debt crisis prevention should be put again on the priority list. Another area of work or a fourth area of work is the acceleration of the closing of the multifaceted digital divide and increasing investment in sustainable infrastructure and a fifth point is combating illicit financial flows and do investment and do management while there is a major leakage in the system through the illicit financial flows. I'm happy to see some good agreement as announced by the G7. It's good to see some good agreement between the G7 and the G20 and issues related to taxes and tax evasion but this is just a welcome step. Efforts are needed to neutralize the ways in which it is highly screwed towards advanced economies all of these measures to deal with tax evasion and the final point is boosting the support required for countries in special situations for an end largely excluded from relief initiatives including middle income countries that are suffering from variety of vulnerability. Thank you so much. That was a very stimulating video. I'd like to now just hand to MacMood. We're running a little bit slow on time just for any additional comments that you have MacMood and I think probably your presentation is also on your website I suspect so if people want to review it later or we can put it on the wider conference website. So do you have any additional comments MacMood? No thank you so much and sorry I took more than what I planned but let me just say something about how again to prevent a crisis basically through ability to detect where the sources of such crisis could be and one of the things is basically a simple question where the debt gun so far who is bearing the debts that have been issued in the case of the emerging markets more than 60% of the debt issued ended up with the local banks in the case of the advanced economies more than 20% with the central banks. So here the way to handle the debt implications as far as where it is sitting now is basically going to be different from the advanced economies to the emerging markets. Then the big issue of concern which I mentioned I think repeatedly but let me say again because there are opportunities because of the anger in few weeks G20 meetings annual meetings. The initiatives of the UN Secretary General are about short-term measures mid-term measures and long-term measures. The short-term measures DSSI and G20 announced that's not going to be extended. It's not going to be very helpful especially that we're seeing the same kind of trouble that we're in in developing economies are still with us today. What's so-called common framework is not that common. It's only three countries that benefited from it so far and didn't resolve their problems to the three low income countries in Africa. It's not covering the middle income countries and it's not covering as well the private sector creditors and many of the countries are reluctant to use the DSSI and the common framework because of fear of downgrade by the rating agencies. So we need really here to be innovative but technical solutions are there that will be needing the political leadership that should be demonstrated in the upcoming meetings and there are of course a link between all of that and climate change as well but I'm happy to come back to this issue because Glasgow is going to be the host of climate change and there are many solutions related to the debt swaps and climate that I'm happy to tackle as well. Thank you so much. Okay thank you very much for very stimulating intervention and as I said I think we can probably put the whole video up on the wider website for people to review later and so now I'd like to turn to Maureen Ware for her presentation. So Tran if we can bring Maureen up on screen. Thank you Tony. I'll just pick up from where the previous presenter stopped. I think he's given us a very nice coverage globally so it makes sense for me to focus a bit on the African debt situation and I'll zero in with some examples from Kenya. So if you go to the next slide please. So why are we concerned about the sub-Saharan African public debt situation? I think the previous presenter has clearly staged the stage by giving us what's happening globally and if you saw one of the charts there is that chart that showing that having developed quite rapidly and that happens to be most of the African sub-Saharan African countries fully that category. So what we can basically say is most sub-Saharan African countries as we speak are grumbling with debt. We have seen more countries falling into either moderate, they are at either at a moderate risk or high risk or have actually already fallen in debt distress. For example Mozambique, Somalia, this economy is already in debt distress. Even for countries like my own Kenya which have like a few years ago classified under low risk of debt are now under the high risk at high risk of debt. Small economies as well not being spared. Uganda, Rwanda a few years ago they were classified as being at low risk of debt. As you speak right now they have now moved to moderate risk and once the countries are at moderate risk it means that there are high chances that they are going to move to the to high risk of debt. So we have a situation where about we are talking about about 30 countries having either being at in one of these scenarios or whether moderate high or in debt distress and this is a situation that is really worrying. And as I think Mahmood presented or picked out we are not this is that situation he already started manifesting itself way before the pandemic. So what we've seen right now is that if you look at most of the African countries debt to GDP ratios have actually edged up. For example in my own country here in Kenya we are now talking about a debt to GDP ratio of about 65 percent way from below 50 percent just a few years ago. The other important point to note is the shift in the composition of the external debt. We have seen a decline in multilateral debt on one hand and an increase in commercial debt and this follows from the fact that there has been most of these countries had easy access to their capital markets as their interest rates especially and also their credit rating situations of these countries improved especially after the financial crisis. Now what has that got to what does that lead us to? If you just go to the next slide okay I had an example there for example in Kenya in 2020 the share of multilateral debt was about 66 that has declined to about 31 percent. On the other hand the commercial the share of commercial debt has increased from barely four percent in 2010 to about 31 percent in 2020 and this is a scenario that is witnessed across most of the economies. What are the implications of this? One of the implications of this is of course directly leads to increased cost of debt services. Now since I'm not able to show my slides from this end Trump if I may ask you to just go to the second last slide I just had like a simple chart there just to show what this implication of interest payments really mean using the example of Kenya. Go to the next slide please next next the last one. Yeah so just to assess this point in the fiscal year 2020-2021 the external debt this is the external debt interest payment by lender category and we can see from this slide that we can see that over 60 percent of interest payments are going to commercial lenders and also if you look at the total interest payments to the external on external debt 45 percent of that was on interest payments. So basically this is part of the reason why most of these countries have actually found themselves in fact sliding into debt distress or situations of moving from law to moderate or moderate to high debt risk. Can you if we just go back please. So the other implication of the increased cost of debt servicing is basically means that we have a limited space for limited fiscal space which has been worsened by the adverse economic impact of the pandemic. So we are seeing a situation where revenue for revenue has been falling or we have witnessed revenue shortfalls because remember that the impact of the pandemic and the lockdown measures had a drastic impact on the revenue domestic revenue collection since due to the slowdown of the economic activities and we on the one hand we have this revenue shortfalls and on the other we have seen elevated government expenditures of course to deal with the pandemic like I mean there has been there has had to be boost in terms of financial expenditure in terms of boosting the health sectors to cope with the pandemic. So with this limited physical space it immediately and of course it implies that we have also limited space for provision of economic financial stimulus and social protection to cushion the vulnerable groups including the poor. Now if you look at for example the fiscal stimulus that has been put up by the developed countries like US or Italy it's nothing and you compare with the fiscal stimulus measures that at least the African countries have attempted to to put in place it is nothing comparable because there is there is very limited flexibility to offer this kind of economic recovery stimulus which is in their need given that these are the same economies where we do not have employment benefits where most people have lost incomes due to pandemic and where we are seeing a situation of approximately it's being estimated like over something like 30 30 million people falling into poverty. So if there any part of the globe the world where such measures would drastically be needed then it's these particular economies. I think Muhammad also has presented quite well that I don't need to deliver the fact that the achievement of sustainable development goals is at stake. Next slide please. Yeah and also I don't want to repeat the what has already been said the timely response that we saw at the international level is commendable but I think it is important to note the limitations of these measures. Of course we do appreciate that these are short term measures but if we talk for example the DSSI which is ending in December 2021 it's only on temporary suspension it's only a temporary suspension of debt service payments to official bilateral creditors and that excludes private creditors and the amounts involved are quite minimal. Now how do we then for example handle the issue of the rising debt service for example even to the commercial lenders. The issue of SDR allocation I think it has already been highlighted that the entire continent's allocation is just $27 billion. This is just 4.2% of the $650 billion which is not even an eight and I think that this was the time if IMF was to make history by allocating this extra SDR allocations using a different criteria rather than based on quarters. Desperate measures require desperate responses. I think sometimes you have to go out of the norm and do things differently depending on the situation. Could into it then consider things like instead of using the quarters instead of then base it on other factors like need or most affected or most vulnerable the vulnerability of these economies. So if $27 billion is for the entire continent and one country for example has $29 billion where does that leave the majority of the people who actually need most of this help that would come from these SDR allocations. Of course there has been issue of voluntary reallocation from the wealthy countries but I don't think that that is something that is going to happen automatically and God forbid I hope we may see that even if that takes place it may again introduce some kind of conditionalities while maybe perhaps the original allocation was conditional these are free allocations which are not based on any conditionalities. Next slide please. So Maureen can we quickly conclude so I can yeah so this is actually like my last yeah so what can be done I think um there's that situation in my view needs a multi-pronged approach to addressing the death and death sustainability challenges that we have witnessed. So there's more to be done I think we need to be talking about an economic or debt relief package which would include things like debt structuring and actual debt relief not just suspension this need for increased transparency both on the data side on the creditors side I mean on the data side and also on the creditors side there's also the need for prudent debt and economic management particularly on the on the data side African countries can do more with the resources that they have I think we have seen if we look at the reports of the auditor generals in most of these countries you find a lot of misallocation of resources inefficiency and some amounts not being known what how they have been spent issues of corruption we can still do more with what is available there's need for clear debt policy including debt saleings some of countries have these but again enforcement has been an issue diversification of debt sources I think exposure to one dominant let's say creditor has its own risk domestic resource mobilization there's so much you can talk about this of course when you talk about domestic resource mobilization comes to mind is tax revenues but I think we countries need to be more innovative about this and we have seen that sometimes like right now countries are under pressure in increasing tax tax tax rates but I think they need to be more innovative in terms of widening the tax base and also exploring the capital domestic markets infrastructure bonds countries like Kenya's issued infrastructure bonds which have proved to be quite successful and raising domestic savings we also need to look at the role of fdi trade opportunities how can we make these countries increase their capacity to service debts by giving increasing the export revenues and building back better we have an opportunity to build back better by transforming the doings undertaking some serious economic transformation which requires rethinking some of the development models and financing and I think it's also good at this juncture to mention that whereas we talk about all this I think we cannot like isolate it with from the role of access to vaccines in first tracking fast tracking economic recovery and unfortunately again we have seen an equal access to vaccines most of the african countries population how countries have not even vaccinated even maybe we are talking about less than five percent for those ones which have already made a which I have gone ahead to to to initiate this this vaccination programs yeah and thank you very much for so thank you very much for particularly the last point you know this is a pandemic and we have to act with great urgency for it so if we could now bring up bring up david on the screen david mahali on screen and unmute him we will be running a little bit over time folks but I'm not they're afraid this is the inevitable consequence of using these technologies so david the floor is yours you we've had a very interesting couple of presentations what are you going to add here to the story thank you thank you so thank you so much I don't know if Trump could handle my slide or unlock my access to slides because I don't have access to slides right now can you hear can you hear me all right at least can you hear me yeah we can hear you and tramp can you unlock this more please I don't have access to that button it just stays red I want to talk about three things and because my Mahmoud and Maureen have already touched on so many issues and if I get access I still don't have access to to unlocking those slides okay that's good if you present them that's even better so the first thing I want to talk about is the DSSI which which which both Maureen and Mahmoud touched on and we did some particular research with with Andrea Presbyterian Valeti Lang that's the next on the next slide and the bottom line from that's from that research is that DSSI worked in the short term so what our research finds if you go to the next slide is that the the the borrowing rates of these countries the 16 countries in the DSSI that also have traded bonds because many of these DSSI countries don't have bonds that are traded on open markets but for those that have bonds on the market we can see a drop in in in the borrowing rates about 200 basis points so instead of borrowing at 10% maybe they're borrowing at 8 the the rates on these ones are like 8% that's 200 basis point drop and I'm not going to go into the methodological detail it worked in the short run when we thought that maybe this is a very quick sudden stop and then maybe you know countries can sort of escape COVID with lockdowns and then other measures in the long term either we this method that we applied would work there had been so many things have happened including defaults in Zambia the common framework all sorts of things so it worked temporarily I don't I but DSSI was never designed it's only postponing that it was never designed to help in the long term and this is an ongoing it's it's going to be a it's a long road to get out of this pandemic so that's on the SSI the second point I wanted to share I'm going to try to be quick again in the interest of time that's on the second slide I think one issue that's not being touched on is who the creditors are so obviously there's the the private sector and you know and but then there's the official creditors and the official creditors are the ones you would expect or you would hope can step in in times of crisis trying if you can go to the next slide and many many people have written and discussed how China has become alongside the World Bank and some of the multilateral the dominant multilateral so I so so China which which is shown in blue is is the is alongside the World Bank the dominant creditor especially in sub-Saharan Africa but in many regions it's it's one of the one of the major ones in terms of total debt stock what people have been less focused about and you can see on that on that slide actually that you know no no anyways so China's the office is has been an increasingly important and now the dominant official bilateral creditor but what has received less attention is something we written with Scott Morris on is how for many many years China has been dispersing more and more debt that's the red line so new fresh loans to developing countries every year growing growing rapidly from bail barely any debt disbursed in 2004 to massive disbursements of 20 30 billion a year in 2015 2016 when it reached speak and then it started declining again that decline has been noted by some they've it has partly domestic reasons things are happening about China repurposing towards its own domestic economy partly also because they've been burned by some of the there's been some debt problems Djibouti was the first Sri Lanka and some others but the other thing that that that you can see in in the World Bank data if you go very granular is that the debt servicing costs have started increasing obviously that servicing comes with the line right Chinese disburse loans and it's only after some years there's often like grace periods that the disbursement comes and what we note in our piece is how in 2019 for the first time ever really or first time in the in this new period developing countries have serviced more debt than they have received in fresh ones to China so China's net position if you will has has changed many countries are now servicing more debt than they're receiving now obviously the SSI helps with that in the short term for the for the next two years it's been postponed but we're still in a new world compared to what was before where countries were excited that there's this new lender in town official lender in town which provides loans that are relatively cheaper credit than say bonds like compared to the private sector but now repayments and that that I think this is talks a bit to this type of conflict we might expect between creditor and lender when we get into a repayment situation and and the third point I wanted to talk about briefly on slide three is collateralized lending because I think that we're going to see more you know DSSI has sort of and SDR allocations have helped in the short time so maybe there's a more breeding space but as we you know as we go into 2022 I expect there's going to be a lot more conflict between between official creditors and private creditors and under and you know as countries really struggle to to to get more financing because to fill their needs and I think one aspect that is going to be important is is collateralized loans already we've seen that in many many countries this is these are examples from Africa where collateralized loans have either countries have gone very creative in trying to get new financing or where they reached conflict or there was a conflict because they had collateralized some of the lending with natural resources so Ghana and DRC were two countries that very recently tried creative ideas to sell their future proceeds and one takeaway I wanted to share from our research with Jijong Kwan and Aishah them on on resource bag loans is how few lenders there are actually in the marketplace who are interested in providing collateralized loans it's basically I mean there's there's basically it's basically China and oil traders and if you look at the volumes in terms of the money it's literally mostly Chinese companies that offer such so such collateralized loans so so that means that there's not really really competition in terms of providing such credit and yeah and countries are but countries are getting creative they do want to they do want to leverage financing in a difficult situation so many of them turn to to to the natural resource base because especially because we are in a mineral boom there is strong demand for minerals and so so I think that's a space to watch and in our report we provide some recommendations on how to do this kind of borrowing better okay I'll stop here thank you so much for for being able to to share my my research and thoughts so thank you thank you very much David as I said we are running over time but I just like to have a response for a couple of things that have come up in Q&A one of which and and anybody can reply to this across the panel can we trust the sovereign credit ratings these seem to control the lives of debtors you know the standard and poor and fit ratings can we can we trust that and a second issue that seems to be coming up in the chat is how much of the borrowing that we're seeing can actually that be attributed to the response the fiscal response to the pandemic so how much of this borrowing that's going on actually is then flowing into the fiscal response you know healthcare and so forth in response to the pandemic so does anybody on the on the panel want to take the question about do we trust the sovereign ratings and then move to the fiscal response question or you can do the fiscal response for a small one on the ratings actually on the DSSI rating the agencies played a very particularly problematic role in the beginning the when the DSSI was announced and actually you can see that in in our own analysis the rating agencies came out in rather uncertain words but they kind of they implied that countries might get downrated for participating in the DSSI so many countries worried including Kenya actually some more in Keshavar on that about participating because it might create a stigma now you know our research strongly contradicts that we saw no stigma in fact we saw rates going down and we also saw rating agencies sort of back walk back this kind of downgrading there's been no downgrade for DSSI participation whether there'll be some for common framework it's where we had to see how that plays out that's that's what I can share on the rating agencies and more in the back boot do you have any view on the on the ratings agencies or on the fiscal response question okay maybe just to add what David has said yeah it's true that at the beginning countries were very skeptical about participating in the DSSI DSSI initiative because of the downgrade and I think it's good that David's research shows that thank God there has not been no no significant rise in the in the rates but I think I think right now as you clear we clearly saw from David's presentation we need to wait and see what lies ahead because if DSSI is not going to be extended then it simply means that these countries will have no option but to find ways of paying the debt and the question is whether and let's say by 2020 next year whether these countries will already be having the breathing space that was actually being created in the first place because the pandemic remember it's not over and still with us so the the the impact of the spending on the pandemic is still there uh african countries still have to vaccinate their population there is the they they'll still be need to more to spend on that and so we we we hope we can only hope that the situation with the rating will not then again maybe lead to down down downgrade of the ratings when these countries find themselves or when that the DSSI initiative is suspended all together in terms of how much okay I thought I'm just chipping on the next question I think that one someone will have to go to the actual data but I know that most of the the the the demand for for for more debts in especially after the pandemic has been triggered by the pressure to first of all again deal with the increase to to the to the elevated expenditure that is needed to deal with the pandemic so we may not have the like specifically specifically the the numbers but we know that at least in the context of Kenya part of that funding has really been triggered by the fact that the government has had to to to increase the expenditure towards the fiscal response needed to deal with the pandemic yes yes okay so thank you very much Maureen I'd like to just hang to Mac mood I'm going to give you the last word from the panel Mac mood your your response on debt rating agencies and fiscal response right I'll be very brief on the issue of the rating agencies the issue of trust as far as the markets trust them we need to trust them but the matter is much more complicated than that of course because if the whole international monetary and financial architecture that's being challenged as far as the existent pillars of the current international financial monetary architecture the sovereign rating agencies are doing what they are being paid for or charging the issuers and the markets for as basically doing the kind of rating and we cannot tell them stop doing what you should be doing and tell the people that matters are under control while they are not or much better words than they are this doesn't mean that they are perfect we see them in doing some major mistakes in the past including the global financial crisis but now we cannot blame them for trying to do the job I think the the system needs to go beyond beyond the including of course the the fears of the mdbs to lose the triple a rating and that's why they are not participating in the dssi so that I think the discussion should go beyond the rating agencies into the global governance the global financial system and monetary system this gets me into the and very quickly to the fiscal question I agree with Maureen it's a country a specific issue and the managing director of the IMF has an interesting say when she found countries borrowing say well borrow and spend but keep the receipts so this is an issue of transparency and and you will be seeing that some of the money is being spent on protected lives or livelihood and some of the money had to be dealing with the problems that we tell we have been sharing that many of the problems that we're seeing developing economies and emerging markets precede the the COVID-19 including the imbalanced structures of their budgets and the fact that they have been in problems of that and they need fresh financing so some of them are borrowing to repay all borrowing which is not really to do directly with the COVID-19 impact on lives and livelihood but basically of old structural problems that need to be built with and challenged but we need to go and see the receipts for accountability on country-specific basis and the fiscal monitor and the fiscal tracker of the IMF could be providing some help on that so thank you Magmood I think that's a very good point to end on so borrow spend in response to the COVID crisis and your SDG needs but keep the receipts so I'd like to at this point thank very much our excellent panel and give them a sort of virtual clap and to thank you the audience we must now end the debt session because there will be other a nice session starting soon indeed there is a series of fireside chats going on but this is a three-day conference and I hope to see you all later in the the meeting so thank you again for our excellent team and greetings to all wherever you are in the world thank you bye