Coming to Terms with Reality. Evaluation of the Belgian Debt Relief ...

| 50 |
International debt relief initiatives and their effects
because of their use of unpublished data sources.
Third, with respect to the economic value (EV) or market value of debt relief, there is even
less information available. The most recent attempt to construct such EV debt relief
measures (allowing for the possibility of default) is that by Johansson (2010), building
further on econometric evidence of the relationship between secondary market prices of
debt and the debt stocks, arrears and rescheduling commitments of middle-income debtors
during the 1980s (a procedure also found in Cohen, 2001). Johansson herself admits that
these measures are highly imperfect and should be taken with caution. Again, figures are
only for 1989-2004 and therefore not reported here.
2.3.2 Creditor-based statistics: OECD-DAC CRS database
In view of the troubled nature of debtor-based debt relief statistics and lack of a
comprehensive creditor-based database (one that would encompass all possible creditors),
it is essential to look at lower echelons, namely at the level of different groups of creditors
if one wants a more detailed (and perhaps more reliable) picture of debt relief. Since this
report is primarily concerned with the evaluation of Belgian debt relief, focusing on the
amounts of debt relief provided by bilateral creditors seems most appropriate for purposes
of comparison. This brings us automatically to the creditor-based Aid Activity database,
also known as the Creditor Reporting System or CRS database, compiled by the Secretariat
of the OECD-DAC, by far the most extensive and systematically updated source of data on
bilateral debt relief operations 31 . The main purpose of this database is to measure and
monitor the amounts of Official Development Aid (ODA) granted by each DAC donor. As
debt relief can to some extent be accounted for as ODA (in accordance with DAC ODA
accounting rules, see Annex 2.2), one can indirectly retrieve ‘gross’ debt relief figures from
the CRS. More particularly, the CRS database makes it possible to assign debt relief to
individual recipient countries per creditor as well as to different types/categories of
interventions per creditor (on the latter, see section 2.2.3). Somewhat strangely however,
there is no perfect match over these different dimensions 32 . Furthermore, as with the GDF,
(most) debt relief is recorded in nominal terms (see Annex 2.2 for more information).
Table 2.4 gives an overview of gross debt relief (being the sum of CRS database entries
‘debt forgiveness’ and ‘other debt grants’ 33 , not including ‘rescheduled debt’) per DAC
creditor for periods 1988-1995, 1996-1999 and 2000-2009. Table 2.5 presents the same
data but now disaggregated per recipient country (or group of recipient countries). For
disaggregation of gross debt relief figures into different (detailed) categories of
interventions, see section 2.4, table 2.10.
31 The CRS database in the first place covers actions on debt reorganisation by the 23 bilateral DAC donors:
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan,
Korea, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United
Kingdom, United States (most of which are also permanent Paris Club members). Data from debt
reorganisation interventions by non-DAC bilateral donors and a range of multilateral institutions is
included in the database but often fragmented.
32 Apparently, data on debt relief granted to individual recipient countries per creditor exclude some
categories of debt relief interventions.
33 This includes service payments to third parties, debt conversions, debt buybacks and other actions on
debt. This data was only available from 2006 onwards.
Coming to Terms with Reality
Table 2.4 DAC (creditor-reported) nominal value of gross debt relief granted per donor (in current mio
US$)
Donor/
Period 1988-1995 1996-1999 2000-2008 1988-2008
Period
total %
Period
total %
Donor
share
Period
total % Grand total %
Australia 9.49 1.02% 38.23 4.12% 880.49 94.86% 928.21 0.80%
Austria 39.23 0.93% 164.13 3.89% 4,019.06 95.18% 4,222.42 3.66%
Belgium 141.77 5.03% 276.41 9.82% 2,398.00 85.15% 2,816.18 2.44%
Canada 888.73 35.35% 304.12 12.10% 1,321.08 52.55% 2,513.93 2.18%
Denmark 326.20 38.16% 55.18 6.46% 473.45 55.39% 854.83 0.74%
Finland 171.65 43.52% 37.98 9.63% 184.82 46.86% 394.45 0.34%
France 1,704.05 7.92% 2,876.48 13.37% 16,932.65 78.71% 21,513.18 18.65%
Germany 2,348.58 11.46% 1,378.06 6.73% 16,758.37 81.81% 20,485.01 17.76%
Greece 0.00 0.00% 0.57 100.00% 0.00 0.00% 0.57 0.00%
Ireland 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
Italy 545.05 7.58% 390.83 5.43% 6,257.43 86.99% 7,193.31 6.24%
Japan 0.00 0.00% 924.42 5.23% 16,758.44 94.77% 17,682.86 15.33%
Korea 0.00 0.00% 0.00 0.00% 10.33 100.00% 10.33 0.01%
Luxembourg 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
Netherlands 755.49 21.28% 547.91 15.43% 2,247.08 63.29% 3,550.48 3.08%
New Zealand 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
Norway 113.00 35.78% 76.34 24.17% 126.51 40.05% 315.85 0.27%
Portugal 198.99 31.64% 222.58 35.39% 207.31 32.96% 628.88 0.55%
Spain 131.19 3.48% 423.66 11.24% 3,213.65 85.28% 3,768.50 3.27%
Sweden 91.73 12.23% 47.63 6.35% 610.64 81.42% 750.00 0.65%
Switzerland 88.16 13.40% 46.81 7.12% 522.92 79.48% 657.89 0.57%
United Kingdom 422.12 3.86% 911.96 8.35% 9,589.03 87.79% 10,923.11 9.47%
United States
DAC Countries,
6,492.00 40.10% 282.05 1.74% 9,414.63 58.16% 16,188.68 14.04%
Total 14,412.12 12.49% 9,005.35 7.81% 91,925.89 79.70% 115,343.36 100.00%
Source: Authors’ own calculations on basis of CRS database
From Table 2.4 we derive that DAC donors delivered approximately 115.3 billion US$ of gross debt
relief (in nominal terms) to recipient countries between 1988 and 2008. Most of this debt relief was
delivered from 2000 onwards, once the Enhanced HIPC Initiative (and later the MDRI) came into
force. France and Germany have been the largest providers of debt relief (accounting for about 18.7%
and 17.8% of the total, respectively), followed by Japan (15.3%) and the United States (14%). The
Belgian share has been 2.4%, nearly on a par with that of Canada (2.2%). Looking at the timing of debt
relief on an individual creditor level, one can notice important differences between creditors. Finland,
the United States, Denmark, Norway, Canada and Portugal have all been relatively quick in relieving
their debtors, while Austria, Australia and Japan participated almost exclusively in the most recent
2000-2008 period. Belgium has also moved comparatively slowly in granting debt relief (5% in
1988-1995, 9.8% in 1996-1999 and 85.2% in 2000-2008).
| 51 |