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CAPACITY BUILDING FOR EXTERNAL DEBT MANAGEMENT IN THE ERA OF RAPID GLOBALISATION
Public debt management has become a priority in many developing and emerging market countries-a change from the early 1980s. When the international debt crisis occurred in 1982, governments that were managing their external borrowings focused attention on controlling and recording medium- and long-term external debt but paid little attention to short-term debt. Typically, different institutions within governments dealt with domestic and external borrowings, and the management of domestic debt was not considered a priority.
Poor external debt management has been viewed as one of the main constraints in achieving the MDGs for many developing countries, particularly in the Least Developed Countries (LDCs), because it hampers the stability of the economies and external resource mobilization for further development. While financing and managing external resources in a sustainable way are crucial to developing countries, many developing countries in Asia and the Pacific region are not sufficiently equipped to manage external resources effectively in a rapidly changing global economy. The Asian financial crisis in 1997-98 provides a lucid example of how the problem can assume a regional dimension through contagion effects. Furthermore, countries in the region are often constrained by the limited number of qualified personnel in the debt management offices. Therefore, they often do not have sufficient capacity to manage external debt effectively on a broad basis, and their resource mobilization is not as effective as it should be for sustained development.
Through the project entitled Capacity building for external debt management in the era of rapid globalization, UNESCAP's intervention in this area will focus on improving the capacity of the developing countries in the region to deal with external debt more effectively. In order to strengthen comprehensive and sustainable capacity for effective external debt management, the project selected those regional countries with high external debt ratios, and aimed at providing group training and reference materials to the government officials as well as public corporation leaders in targeted countries. These target groups are expected to adopt and apply the recommendations and technical advice provided by the project to improve their policy framework to manage their external debt issues more effectively through better information flow, risk management, transparency and accountability. The project's aim was to contribute to strengthening the participating country's capacity in managing globalization and poverty reduction in accordance with the MDGs and in response to the call by the Monterrey Consensus on Financing for Development.
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