 So, welcome everybody to the second day of this event. My name is Jukka Pirtila. I'm with the University of Helsinki and also part of the UNU-vider research network. I collaborate with UNU-vider researchers in a tax research programme for the institute. So today we start off with the session on, which presents the financial sustainable development report and the speaker is Shari Spiegel, who is the chief of the policy analysis and development branch, a financial sustainable development unit at UNDESA. So she will be presenting the report. And then we have a discussant, our own Amina Ebrahim, who is a research fellow at UNU-vider. So Shari will speak about 25-30 minutes and then we'll have discussion by Amina and then we'll open the floor for the overall discussion. Please, the floor is yours. Good morning everybody and thank you so much. And thanks for having us here to present this report. So this, I want to tell you a little bit about the report first. It's a unique report in that the report is not just UNDESA leads the report, but actually more than 60 agencies contribute to the report. So for those of you who don't know it, right before the 2030 agenda was agreed on in the SDG summit, there was another agreement called the Addis Ababa Action Agenda, which was an agenda on financing for sustainable development. And our office is meant to follow up on that agreement. And that includes several follow up processes including financing for development forum every year and then we were told to put together this report every year. When I first was told I had to lead a task team to write one report with the entire international system, I was horrified, but it turns out that it's actually quite interesting and sort of fun. We work very closely with the IMF World Bank, WTO and then within the UN system UNTED and UNDP. But we also work with every other UN agency and then non-UN agencies, the OECD secretariat and to balance that the south center and the financial stability board is part of this. And as you can see we cover the entire Addis Ababa Action Agenda, which includes seven chapters. So it's domestic, the three on the left, domestic resource mobilization, private finance and development cooperation are the big financing flows. And then on the other side are the sort of big systemic issues of debt trade, systemic issues of stability of the financial system and then technology and capacity development. So our report actually covers all of those chapters. We start with an update on the economic, the global economic context and then we have a thematic chapter every year and then we cover those chapters. So the 2022 report was on bridging the financing gap, the finance gap. So I'm going to give a little bit of background. One of the interesting things similar to the World Bank report we heard from yesterday, our report was the timetable we work on is we have to get it done. The report becomes the basis of country negotiations for the financing for development forum. So we have to get it done by the end of February, even though we publish it in April. That means that the report was basically done before the Ukraine war started. And then we had six weeks when the world changed dramatically. The year before that happened with COVID. The world changed dramatically between the time we finished the report and it went to print. And this time the world changes dramatically again. And since it's been published, of course the world has changed even more. But to start with, it was clear that there are interlink crises that are putting the SDGs out of reach. And the idea was that we need a large investment push for climate action and the SDGs. And of course also at the time for responding to the COVID crisis. And those three different elements places that I listed are the three parts of sustainable development. So the way that it's defined in the UN. So the first is the social side and that was really important, particularly social protection issues following the crisis and the COVID crisis. The second is the climate, the longer term environmental and climate issues. And the third is the economic pillar, which is productive investment. And the idea behind the thinking is that if you have productive investment, not only does it kind of lead to, if it's invested in the right way, development and climate impacts, it also should lead to growth and therefore create fiscal capacity to be able to service debt better in the future. So I think yesterday somebody made the comment that debt's not bad and debt can be good. And that's sort of the underlying thinking that was going on is that in order to achieve this big financing push, debt is needed, but it can be good if it's used in the right way. And it can be good if it's sustainable and we'll get to that in a little bit. So that was sort of the first idea behind it, but the pandemic revealed that there is a great finance, what we call the great finance divide. And basically it's very simple, rich countries were able to finance the recovery and poor countries didn't have the resources to finance, to either finance the recovery from COVID or to invest in sustainable development. And so you can see the first three icons are sort of those big financing flows. The second question is that all of those issues, of course, the financing gaps were exacerbated by liquidity debt and trade issues. And there was sort of the risk of the near term crisis and then the questions of how do you deal with the longer term systemic solutions. So that's sort of the overarching structure of what the report was doing. Of course, since the publication of the report, the environment has become even more challenging. The truth is that everything we highlighted just became more so. So I guess the biggest change was that inflation became a much bigger issues than it was before. And of course, that's an enormous challenge for policymakers when you have inflation together with slow growth. But from our side and from thinking of it from the side of developing countries, and we talked about this a lot yesterday, the fact that interest rates are rising and their weakening exchange rates has enormous implications and spillovers for developing countries. So we've seen $70 billion in capital outflows this year so far and financial market volatility and an increasing risk of debt distress. So the first bullet is the bullet we all discussed yesterday. Actually the numbers that people gave yesterday was 60% of countries. I think as of August, based on the IMF World Bank debt sustainability analysis, the numbers actually gone down to 50%. In part, I think because commodity exporters have actually, some of them are not in debt distress anymore that were earlier. But the second piece of that is that and what we say this when we talk to developing countries a lot is that the volatility we see in sovereign debt markets and the volatility of capital flows is just reflective of the greater volatility of financial markets that we're seeing right now. It's just that when you think about sovereign debt, it suddenly affects budgets and payments and health and all sorts of basic issues. So there's real questions and this was slightly mentioned yesterday of leverage in the system. We've been through a period of such low interest rates that there's a question of how levered the financial system is and how that's going to be delevering and that's the non-bank financial institutions. Questions of fintech that have been actually intermediating credit but are outside of the financial system. And so questions of how much volatility we're going to see as some of this delevering happens as interest rates rise. And then of course the other issue that we've been looking at for a long time are non-economic risks. Those are climate-related shocks, disasters, etc. And the underlying all of our work is the interlinkages between those. So and it's something that I think has changed a lot that five or ten years ago, if you tried to talk about with economists about how these non-economic impacts are impacting the economics and how they should be incorporated into economic analysis, you would have gotten a blank face. And I think now there's more and more thinking about how do we incorporate these non-economic factors and how do they change the way we're thinking about some economic outcomes. So let's go back to the report. The first point is, and this is what I mentioned before, is that developed countries were able to finance a large scale the response to COVID, I think everyone knows this, but yet only 3.5% of their country revenue was spent on servicing debt. Developing countries it was more constrained and that's because of limited fiscal space. The first point is on taxes and we have a lot of tax experts here. So I stuck that point into, but it's basically that the taxes as you can see in LDCs, that's the UN term for least developed countries, is significantly less than the tax received in developed countries. And at the same time there were rising expenditures and social protection needs. And then finally, so you have the revenues were low and expenditures were going up. And of course the other piece of all of this is the high debt servicing. So the poorest countries are dedicating 14% of their revenue to debt servicing. And when you look at some of the small island developing states that were not eligible for DSSI, they on average were paying 40% of their revenues in debt servicing. So there's a case where rather than investing or being able to invest in the recovery, these countries were actually cutting spending and education infrastructure in other areas following the COVID crisis. So this is all prior to the Ukraine war and you can see just some of the data in particular that in addition to poverty increasing that there was already forecasts that GDP per capita of one fifth of developing countries wasn't going to be to reach 2019 levels by the end of 2023. And now those numbers are probably worse than they were. So just to say that, just to give an idea of what we were looking at and this great finance divide that was sort of identified in the report. So going first to domestic resource mobilization. What this graph does is it just adds up prior to the crisis, prior to COVID, how many countries and the number of countries that were getting, for example, between zero and 2% increased their tax revenue by zero to 2% or 2 to 4% or more than 4% or negative. And I think the interesting thing is that even though on average and most countries, the majority actually increased revenues slightly, the amounts are very, very low and they're nowhere near the amounts that would be needed to finance the 2030 agenda and the SDGs with public finance, with domestic resource mobilization. So if you look some of the numbers that of course during the crisis this got worse. So tax to GDP ratios declined in 72% of countries but that revenue to GDP was below 15% which is somehow considered an informal threshold in 76 countries after the pandemic and basically to get to the points we need, we need much higher numbers than the highest, than 4% a year. So the main point is simply that this tax and domestic resource mobilization and the reforms to raise tax revenue including international cooperation, international tax cooperation are really important but they're a long-term project and they're not going to be able to solve the problem in the near term and yet given the crisis we're seeing, we need funding in the near term. So this is a really important component and it needs to start now or to continue now but it's not something that's going to happen in the near term to solve the problems, to address the crisis we're seeing. This is going back to the debt issue just to show, it's just a graph that shows the amount of financing, the amount of budget financing that is going to finance interest payments and you can see that in the poorest countries, the LDCs and also in SIDS, the amount is just really high of the budget. So this was all prior to the war and one more graph on this. So the reason, if you look at the left hand side, you'll see this is just showing, the left hand piece is just showing figuratively the same issue that the green bar is the amount of money that countries were able to spend to respond to the crisis and you can see that it's positive for the developed countries and middle income countries and almost non-existent for the poorest countries. The poorest countries did have a benefit from DSSI which you can see in the negative red there but that is of course ending and in fact if you looked at the upcoming payments, debt servicing in 2023 and 24 it's going to start spiking in part because the DSSI numbers are now going to be compounded going out. And so the other piece of this that's interesting is that prior to the war you can see in the last graph that credit spreads had started increasing but there was still a gap. So the medium emerging market country was still able to borrow relatively cheaply and it was only the 75 percentile that you saw this enormous gap between the borrowing costs. Now that has changed. So credit spreads, sovereign bond yields are now over 10 percent for over 20 countries and capital markets have effectively dried up for at least 54 developing countries. So we're starting to look and to think a little bit about the cost of borrowing because one of the questions is how do countries and how can if we can't look to domestic resource mobilization as a solution the second question is well we said at the beginning that debt is not bad but that's only if you grow enough to compensate, grow more than the debt than the cost of the borrowing. So if the cost of borrowing is really expensive you're never going to be able to grow your way out of the debt of the borrowing and so it's you can more likely run into a debt crisis. So the but one of the interesting things that we looked at and we did some work on this actually with Ugo though some of his work did not make it into the report. But we work with 60 agencies and everybody has to agree on everything and one of the agencies that's in this room crossed out Ugo's box but the work that's here is actually the flip side that did make it into the report is the flip side of the same story and the point is that sovereign borrowing has historically been very expensive. So since 1995 even after you net out defaults the investors have actually earned six percentage points above the risk-free rate on investing in sovereign bonds and that's even after you account for any defaults and basically they have been the best performing asset class compared to equities, compared to corporate bonds compared to any other asset class. If you invested in emerging markets over this long period of time you actually did really really well and that's even after adjusting for volatility. So what that means is that developing countries who are borrowing on capital markets are paying a very very high price for borrowing that goes beyond what's actually implied by their credit and yet this has been a continuous story so the question of how you can actually address that and reduce that spread is not easy. So that's basically sort of the story of the great financing divide that we were sort of looking at when we looked at the report and then we start thinking about what are the solutions and as I said we have to cover all of these topics so we're looking at issues with tax we're looking at private finance, development cooperation trade, debt, systemic issues and technology covering a huge amount of information and trying to do this and so I've summarized some of the ideas here and I'm not going to go into all of them just looking at the time because it would be but I'm going to just go and talk about a few of them so the first idea and this actually is the idea that is development cooperation, an old idea and in the Addis-Baba Action Agenda development banks was actually brought up and was at the core of the thinking of how do you finance sustainable development even back in 2015. Now it's the first time I think that the international community is actually thinking about this in a serious way though at the time of the agreement it was actually a basis and not just the MDBs also public development banks, national development banks such as KFW, national development banks that lend across borders but also domestic national development banks and so the first set of recommendations are first of all on OTA and in particular on grants but as we discussed yesterday there's limited grant financing and we don't know that that's going to actually increase the second is to think about strengthening the system of development banks so there's a lot of work going on on how do you strengthen the MDBs with the G20 capital adequacy framework work of how do you better use capital actually the Agenda Agenda was the first place that called for that that called for using capital more effectively for MDB capital more effectively and then also obviously in terms of recapitalization but it goes beyond just thinking about the MDBs so the recommendation then says that we need to look at public development banks more broadly and how does the system of public development banks work closely together when are there opportunities for co-financing for risk sharing mechanisms across the system as well as from learning particularly there are no question that there are governance issues et cetera at some national development banks but nonetheless they also have a lot of domestic national information and is there a way to better utilize and better leverage some of that information and at the same time is doing capacity development so that's one set of recommendations as like we need additional finance and there's a system that's set up to do that the other interesting thing about the using the national development banks in particular is that when we think about well a government is borrowing and yet they don't have a balance sheet so we start trying to figure out we're looking at income statements all the time to try to evaluate whether a government can repay its debt or not and so we don't know where the money is going at the very beginning of the discussion one of the main point that was discussed in our task force was it depends on how the money is used we've seen countries borrow a lot and they borrowed a lot in the 2000s and it didn't lead to necessarily lead to growth and so there's a big question of how the money is used as to whether debt's going to actually have a positive impact on growth and sustainable development and so if you can ring fence where the money is going into an institution that is financially sustainable and that has good governance then you're able to see the asset and liability side next to each other so this idea of thinking about looking at a development bank or some sort of institution that has assets and liabilities is a way to begin to think about how do we measure and think about the impact of where the money is going so that's the first set of recommendations second set of recommendations is let's try to reduce that big spread on capital markets now that's really hard the most obvious thing is actually national actions so you reduce risk in your country and clearly your credit spread goes down so that's the first recommendation and that's all throughout the report it's something that's a big old discussion of how do you actually reduce risk and increase your enabling environment and improve your enabling environment at the same time efforts to reduce global volatility but these are old discussions that's in our systemic chapter and we know that we're not getting there though there are discussions that have been on for a long time the second set of issues that we looked at were issues related to credit ratings and debt sustainability assessments again the report big debates about this in the task force some of the task force members did not really like to talk about this too much so what's in the report is less than the really fascinating conversations we had outside of the report in the analysis going into the report the analysis behind the report but one of the issues is that credit ratings as well as the DSAs don't really distinguish between liquidity and solvency so what a DSA is doing is it's running lots of simulations to say if we over different simulations if you keep borrowing what is the path of your interest payments and does the path level off or does the path go up and compound to a place that's unsustainable and so that's based on a set of assumptions that go into that model and is there a way to say well what if we actually had long term cheaper funding from the international system does that change the debt sustainability analysis so this question of thinking about what we can call a long term DSA or long term credit rating or you can think about it as looking at liquidity versus solvency issues is can we have better tools because if it's really a liquidity crisis only then somebody should be willing to lend but it's very difficult to distinguish between when it is and when it isn't but when can we improve our tools to be able to try to do that better and then the final point under that was to use the growing interest in sustainability we talked a lot about this yesterday so can we use growing interest in green bonds etc to reduce borrowing costs so far that hasn't reduced borrowing costs but can it be done maybe through sustainability link bonds etc that was discussed and presented yesterday as well the next point which I'm not going to go into in much detail is resetting financial markets the second bullet of that is a lot of the issues of sustainability reporting which I think will be discussed later this afternoon but we can talk about the questions and answers if you want to because I don't think there's time to go into it in such detail but we also looked at a lot of the questions about companies that report on their sustainability how can we do it in ways that are more accurate how can we do it in ways that are consistent across different company reporting and then questions of how do you verify or assess the credibility of those numbers as well as the credibility of things like sustainability ratings because right now the same company is rated high and low by different rating sustainability raters and one of the questions is when we think about credit ratings our traditional credit ratings it's based on audited financial statements so you can look at the credit rating but you can also go back and look at the audited financial statement or if it's based for a sovereign you have some information that you can look at yourself with sustainability that it's really a black box we don't know what the sustainability raters are using and we also don't really have very good information for the incoming information which is very subjective as well so it's a very tricky place but it's also a new place where there's new thinking going on and then the next question was on issues of liquidity and the global financial safety net whether we should have more questions related to SDRs the more systemic issuance of SDRs is not in the report again but it is a question that there has been discussion on some people have been calling for regular issuance of SDRs and we've begun to think about what about counter cyclical issuance of SDRs and can the international system begin to explore ways that that could be done more efficiently finally the question is to urgently address the risk of a debt crisis that would be a long discussion but that's been going on now yesterday for this whole conference but I would just say that and again the report was written at a different time and it talks a lot about issues with the common framework so I'm stepping away from the report a little bit and the UN Secretary General is talking about this now he called for what he called the DSSI expanded but the idea is that the main thinking I think is that there is a high risk of a solvency crisis happening across countries and the international community is just not ready to address it we don't have a system in place to address it if there is a systemic crisis and so the community should be thinking now to have something in its back pocket ready if something happens and the world has changed a lot and so it's time to really begin to think about if there is a crisis how do we respond to it and particularly this question of coordination across creditor classes so if we have an official sector led process how do we bring in the private sector into the official sector process and you have to think about how do we bring in the private sector and how do we bring in the private sector into the official sector process and you need to have a concrete mechanism to do that and again this isn't the report doesn't say this so explicitly this is going on this is more work that's been done more recently and they're thinking that's happening now but can you use carrots and sticks to try to incentivize private sector participation in official discussions so finally I just went back to some of the issues on the countryside including the issue of domestic resource mobilization and medium term revenue strategies and I put on this discussion of integrated national financing frameworks which we don't have time to discuss so we'll just skip that for now and the final thing I wanted to say is that every year as I said we have a new topic, a new thematic chapter and governments guide us in thinking about what that chapter should be so this year the chapter for next year is actually on what yesterday you called green sustainable green industrial policies we're thinking of it as sustainable industrial policies but what does that mean what can we learn from historical cases successes and failures and then how has it changed and how is it different today given the new components of climate and sustainability that need to be thought in sort of where we as a system are looking into for the next year's report so thank you so much I know I covered a lot of information as the report does so I hope it was helpful and clear, thanks Thank you, Shari, so much for the wide covering presentation and now we move on to the discussion, Amina, please Okay, so thanks, Shari so I have this task of discussing a report that's more than 200 pages long so I'll pick out some of the key messages and then I'll try and link it to some of the work that we do at UNIWIDA so this is a really rich informative report and it really emphasizes this widening gap in financing for sustainable development and this really pull and push between these rich and poor countries so my three main takeaways really was that the cost of debt debt financing is really crippling for developing countries and it's really made it difficult in the recovery of COVID-19 Rich countries are able to support their recovery and this is in part due to this high borrowing but then also at ultra low or very low interest rates and then poor countries are spending billions in servicing debt and this actually really hampers this investment in sustainable development so for developed countries they were able to respond much better to the pandemic and part of this is about the ability to mobilize their resources locally and then also it's about stronger political and economic institutions that could actually negotiate their response to the pandemic and you can think about the vaccine discussion there and then developing countries, my own country South Africa we struggled a lot in the fiscal space and then thinking about how are we going to repay debts so my three main comments and these are not really again quite challenging to comment on a comprehensive report but these are maybe less maybe comments but more some of the things that I took away from for my own work so the first one is the comment on special drawing rights and one of as a tool to address systemic risk the taking action on debts the sort of where Shari was going towards the end of her presentation and then some of the revenue mobilization challenges and opportunities so there are many challenges but I think our work has also shown that there are some opportunities to increase revenue so we know that debt to GDP ratios are really high before the pandemic and it's just been exacerbating the risk of debt distress and then special drawing rights were provided to countries to boost liquidity and come back to pandemic effects but some countries use them in different ways some were using them to pay their debts while others were using them for government spending and so we think one comment is while SDRs are maybe a welcome boost they probably can't show the big burden of bouncing back from the pandemic and so more might need to be done in that space and then SDRs are maybe meant to complement rather than substitute other financing channels my second thinking was around the sort of uneven or not level playing field and so Shari had this really nice graph and it's in the report of the different areas of debt stocks and servicing costs and so it was clear there that debt stocks were developed countries increase and this peaked in 2019-2010 but servicing costs were reduced middle or MICs saw the sticky increase and then they had this service cost that kind of view shaped that goes down and then it comes back up again the LDCs have low debt stocks or debt stocks when compared to the developed countries but their debt servicing costs are then comparably higher and the SIDs almost never have access then to capital markets and so they rely on this non-concessional and short-term expensive debt now the increase in service costs may be a reflection of reduced resource or domestic revenue an increased access to non-concessional debt and the increased use of more short-term expensive debt is in this discussion some of this can be explained by the structure and the nature of economies in these countries and where there are some more difficulties emphasized in some of the middle income countries so this is really where I guess our work in wider comes into the discussion so many developing countries have many domestic revenue mobilization challenges weakness in revenue management tax exemptions, many tax exemptions sometimes unclear tax exemptions and then shortfalls in the capacity of the actual the revenue authorities and the customs administration to actually draw in the revenue that might actually be there but all is not lost there is still potential to mobilize more taxes and specifically we work in African economies and so some of the thinking around this is looking at better tax administration thinking through broadening tax base and here I'm not just thinking about bringing in more and more firms or individuals into the tax base but actually looking at tax compliance and maybe plugging the holes on tax loopholes and then our work is mostly around using tax data so I have got tax data for revenue and what do I mean by this really a lot of our work is around using tax data to analyze and provide some knowledge for policy making and inclusive development and some of our work is around looking at compliance and how to increase compliance and mitigate some of the potential effects of taxation for enterprise growth and job creation and of course improving capacities for tax and other domestic revenue mobilization is actually a key target for STG-17 so thank you Thank you Amina Shari, do you have immediate thoughts on the basis of what Amina said or do we want to take Yes, yes Alright, so now it's time for questions comments from the audience so we can gather a couple of ones and then we'll give the opportunity for Shari to respond so there's one in the back right at the back well, okay there Thank you very much for the presentation and I will be kind of focusing on one particular question that is, you said that is the premium that the developing countries pay risk premium is about 6%, right but that's on an average, right so there must be some countries, you know 4%, the others are kind of say 8% and something like that so one perhaps, okay, a direct mode of action that could be kind of just taken suppose, you know, just make a comparative study for the two countries with very similar characteristics like, you know, almost even having a shared border or something and if one country pays, say substantially less premium than the other then, you know, you can some sort of a randomized trial, you can kind of point out, like, you know, what could be the possible you know, actions that the government could take for example, one could kind of go to even more specific in the sense that say, the debt investors all the care the premium is coming from the default premium and nothing else, right because the payment is fixed so only what the care is the default premium default, so what countries probably have done something to get a less default premium than the other, so my question is, are there any kind of research or any kind of work done in this kind of a setting okay, thanks for that then there was a second one, if you move from from the back to the front, yes please thank you, good morning, thanks for two great presentations, a question to Sherry it's maybe just factual, I didn't quite follow the numbers on the debt service ratio when we talk about unsustainable debt what kind of debt service ratio as a percentage of GDP or revenue as we talk about, and when is it how severe is the crisis now is the debt service ratios in our own countries, rich countries is much higher so I'd love to hear a little bit more about that to understand a bit and then also at least yes the lady to the left and then we pause and give Sherry a possibility to respond, please go ahead Sherry, the last question one of the points you made was about there's a possible debt crisis coming and we're not prepared and you mentioned cards and sticks given the common framework one of the big barriers has been the comparability of treatment the fact that creditors should share the burden equally what hasn't been able to be operationalized or enforced what do you think is the remedies for that okay, so three questions so in the first question I mean the best there are two separate issues the first issue is that the credit spread reflects the probability of default and the expectation of what the recovery value would be in a default so though of course if it really reflected that correctly you wouldn't see the asset class, the total asset class all of them combined outperforming other asset classes it would be around the same when you adjust for volatility so there's some extra premium in there for whatever reason it could be something as simple as an uncertainty premium because it doesn't necessarily mean that markets are mispricing it they could be just pricing something like uncertainty or something into that premium so the first thing is countries should be able to reduce can reduce their credit spreads and they do that by improving improving their fundamentals as the market looks at fundamentals now the problem is of course that markets look at very short term oriented fundamentals so that it's not looking at a long term it's not necessarily aligned with long term development it's more aligned with short term fiscal space and so they're looking for very specific things can you repay me in the next year and what numbers do I need to evaluate that but given that there are things countries can do to reduce the risk of default based on how investors evaluate countries and so that's one thing and many of those things are good for development some of them are not as closely aligned as we would like so that's the first thing and so you can look at different countries that have reduced their credit spreads because countries have and see how they've done it and how it aligns with the improvements and the reforms that they've made and then there's this other question of can we systemically try to reduce some of the systemic cost and that's a lot harder it's been there for a long time and it may have to do with uncertainty it may have to do with the fact we don't have a sovereign debt restructuring a clean way to restructure sovereign debt so nobody really knows what recovery values will be so there are a lot of reasons that could be behind why that gap is so big and the second question was on oh I wasn't writing it down right on debt service ratios okay thank you jet lagged and not writing things down doesn't work so there isn't any one number or ratio you can look at it depends on the country and clearly developed countries are able to sustain much higher debt ratios than poorer countries are so you do have these debt sustainability analyses you also have credit ratings which are trying to figure out or trying to in a sense estimate the debt sustainability analysis how sustainable is the debt for this country given this country's ability to services debt given a whole bunch of inputs that go into thinking about it so based on those analysis it's I think it's 50% of low income countries are at risk are in or at high risk of debt distress and so I don't know if that answers the question but that's that's right because it's not there's no one number to look at yeah okay and the slide with the different charts the four alright so those were just looking at the debt service how much of a fiscal spending revenues how much of revenues is going to service debt and it was breaking it down by developed countries by middle income countries and by SIDS and LDCs and you could see that even though developed country debt was going up the debt servicing cost was very low for developed countries in part because interest rates were so low but that because low income countries actually you could see that debt actually went down in the beginning of the in the early 2000's and MDRI but then debt starts going back up again and as more and more low income countries and LDCs are accessing markets the cost goes up because as long as they were accessing getting most of their money from officials borrowing then it was very very low cost of borrowing but as they were accessing markets you can see that cost of their borrowing jumping up and then SIDS it's always been quite high that it's been relative to revenue and then middle income countries are somewhere in between so that was those four things I just looked at the revenue to interest costs, interest payments to revenue and then the final question sorry? yeah that's a we can't we don't we're at the point where we can't even get the official creditors to agree so that's not where we're not at least to do it quickly in a timely manner so and then the second question is how do you bring in across creditor classes which is even harder so so one can think about and there are proposals out there of mechanisms you can use sweeteners you can or you can use sticks so one thing is you can use sweeteners and some guarantees so you say we're going to restructure and have some sort of guarantee on the payment from an official sector guarantee something like has been done in the past and at the same time you can try to say that anyone who doesn't participate will be will be will be stuck with the old bonds which will become less senior so you can try to find ways to both incentivize participation and also at the same time make it the old bonds not as good but there are other mechanisms that are out there there are other ideas that are out there similar to HIPPIC that can be that can be used to do that and Ugo just left because he will know this even better than I did thank you there is still room for additional comments questions so I see at least two hands Marty please thank you and thank you very good presentation I was thinking about the point on liquidity versus solvency issue and I think it's very important and the current situation is telling sort of a story about this because you mentioned that 54 countries have lost access to capital markets because of the general liquidity conditions not because of they would have been in any particular problems but because of the basically the liquidity conditions in the developed world now I was wondering we referred to Brady bonds and could there be a sort of insurance policy against the liquidity shock in the following sense that at Brady points you had the credit enhancements via IMF like the Mexico deal in 1990 but because the risks sort of originates from the fact presumably that when liquidity conditions tighten the rollover risk for the developing countries becomes much bigger and hence the risk for those investors who have been investing in of lending developing countries but if there would be this sort of scheme whereby either by directly linking to the bonds credit enhancement enhancements via IMF as was done in the Brady bonds it would ensure that the countries can roll over the debt the developing countries even in a sort of a regime where there is liquidity squeeze with the liquidity support in a way from the IMF and but clearly as you said the spreads are much higher and they go much higher compared to the developed countries in prices and there would be a sort of liquidity backstop for the developing countries debt sorry it's complicated thanks and there was at least a second one please your report includes a long list of policy recommendations and some of them are about information sharing, some of them are about what governments should be doing I think it will be very interesting to tell us what kind of response you have been getting from national governments and what kind of dialogue and to what extent some of these have been picked up and implemented anything else just one more many thanks for the presentation I think you've said a lot about burrowing and debt and all that I haven't read the report but I to explore issues about how the countries can actually use their own internal strengths to be able to finance the SDGs and here I would want to know your talk about how they can leverage on let's say they are what you call the natural resources they are forest they are iron oars and they are fuels and all that I would want to hear your talk on that and then there is also a big thing about illicit fine national flows I think that UNCTAD had some very grim estimates of that and these are things that if the international community can come together and have a good look these are things that would actually open a lot of spaces in terms of financing the SDGs so these are things that I would want to hear your talk on that okay thank you three very good questions okay so maybe I'll start with illicit financial flows so there is a big discussion on illicit financial flows and there are actually three very different types of illicit financial flows so one is tax related and that's really linked to much of the discussions of international tax cooperation to reduce tax evasion and then questions of whether tax avoidance gets included or not the second is on corruption and the third is on taxes corruption and okay I'll remember the second so there are three very different types of illicit financial flows that have very different types of policy responses associated with them could it be crime related then no no no no it's related to corruption I just forgot the term I will remember and so they have so there is a lot of discussion going on on trying to address and in fact the African group of African countries in the UN just submitted a resolution to have a for UN tax convention and there are two resolutions that are going on right now one is on illicit financial flows that are being negotiated right now and the second is on a UN tax convention I don't know if that will actually end up happening but they are being debated right now on the tax piece and then on illicit financial flows more broadly so it's a big issue and though I do think it's important to think of the components separately sometimes you add it up and you may add up you're adding up tax evasion with money counting illegal drug activity and you can't really, when you think of these they don't really you can't really add them up but the headline numbers sound really big and they can at least they may be a good talking point to push action forward sometimes but so that's a big discussion that's happening and the report covers it every year in depth the latest thinking on it as well as ideas in each of these components as to how to address them that's on illicit financial flows and then on terms of national actions in 2019 I think it was the report highlighted something we were just talking about this morning that called Integrated National Financing Frameworks that was our thematic chapter and the idea was it's a very simple idea it's that when you start looking around the world at countries having national sustainable development strategies and in their national sustainable development strategy they actually were beginning to incorporate the SDGs into planning but most of these most of the plans were not actually financed and so there's a question of how do you bring financing into the planning process and so we working again with the entire task force have laid out a process to begin thinking about across these different areas of the Addis Ababa Action Agenda and across these different policies the ones that are a lot of the policies we're talking about on the slide and this is at the heart of the Addis Ababa Action Agenda is that there is both national actions and multilateral actions so countries can't take care of the multilateral actions on their own they can't solve international tax cooperation they can't solve issues of a systemic debt crisis on their own so but there are actions that they can do on their own and we've created a framework for how countries can begin to think about these processes into their own planning processes and right now more than 80 countries have started to implement this or to think about implementing it's still in the very early stages but we do get call discussion so that's a lot that's sort of the mechanism we work with countries on and UNDP is in the lead on the country country work and we are in the lead on thinking about what's the framework for doing this to have a consistent framework across the board though so it's not really a consistent framework because it's just ideas that are going to have to be implemented on a country level and every country it's going to be very different and the idea is to have this very country-led processes but we do constantly get a lot of capitals now read the report so we know they read it that I know because they come and tell us that they're reading the report so we know a lot of them are reading the report and we know a lot of them are beginning to implement this framework to implement some of this into their national planning processes so and then the final comment was more of a comment I think on liquidity yeah I mean it's there's their you know the Brady bonds were were an interesting thing because the countries actually bought the treasuries themselves so and it was in part works because interest rates were so high that they could buy these bonds as a discount and then use the bonds as collateral for their debt to have some sort of a guarantee you know do you so yeah there's a question of having having some sort of international guarantee yeah it's it would certainly yeah help it can be tricky I guess to implement a program there may be an interesting way to think about doing this link to climate possibly or doing this link to some of the global public goods that we that are global public priorities so that rather than doing there may be something interesting that one could think about to link these these together so that there could be sweeteners that are done link to some global priorities that could so again so that the funding would then go into to to climate or other actions that could help reach the goals most out of time Amina any further thoughts from your side no I think Shari covered everything quite well okay so then let us thank the speakers once again we got a very good start for this day and let me move right to the next session thank you everybody