International government debt - UNCTAD Discussion Paper No. 199

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8 than in advanced countries, primarily because most developing countries ran smaller fiscal deficits in the crisis. Whether or not this reversal will be transitory or permanent remains to be seen and will depend in part on the vigour of post-crisis growth. In other respects, the crisis is likely to boost existing trends, particularly the trend toward domestically issued and local currency debt. Looking beyond averages The trends highlighted in figures 1 and 2 mask an important cross-country heterogeneity. Given that these figures are computed as weighted averages, they assign a greater weight to the largest economies. For instance, four countries (Brazil, China, India and the Russian Federation, the “BRICs”) represent nearly 40 per cent of the total output of the developing and emerging world and 8 countries (the BRICs plus Argentina, the Republic of Korea, Mexico and Turkey) represent 60 per cent of the total output of developing and emerging market countries. It is thus instructive to break down the sample across geographical areas and describe both weighted and simple averages. These differences show that smaller countries have debt ratios which are substantially higher than the debt ratios of the larger economies and that the difference between small and large countries has been increasing over time (table 1). Until the first half of the current decade, the weighted average of total long-term international public debt of developing countries stood at 2–3 times its simple average (in 2000–2004, the figures were 21.1 per cent and 59.8 per cent, respectively). By 2008, the simple average was almost 4 times the weighted average (40.7 per cent versus 11.3 per cent). This indicates that the declining debt trend documented in figure 1 is partly due to the behaviour of the largest developing and emerging economies. If we focus on total external debt (public and private), the difference between weighted and simple averages is roughly about 1 to 2 (58.4 per cent versus 25.8 per cent). This would suggest that a far greater percentage of the external debt belonging to larger countries is owed by private borrowers. Large economies also have more debt with private creditors (about 50 per cent of the weighted average of total external public debt in 2005–2008) and smaller economies have more debt with official creditors (more than 75 per cent of the simple average of total external public debt). If we look across regions, we find that, when measured as weighted averages, current levels of public international debt are particularly low in East and South Asia and in East Europe and Central Asia (this last region, however, has high levels of international debt owed by private borrowers) and much higher in the Middle East and North Africa and sub-Saharan Africa regions. Latin America had relatively high levels of debt in the mid-1990s, but reduced dramatically its indebtedness in the second half of the first decade of the new millennium (sub-Saharan Africa more than halved its debt thanks to the HIPC initiative). Latin America, South Asia, East Asia and sub-Saharan Africa are also the regions which show the largest difference between the simple and weighted averages, indicating that large countries in these regions have debt levels which are markedly lower than the debt levels of smaller countries. Finally, there are large regional differences in the composition of international public debt. Most of the international public debt of South Asia, sub-Saharan Africa and East Asia is due to official creditors (if we focus on the simple average, the share of international public debt owed to official creditors ranges between 80 and 90 per cent; if we focus on the weighted averages, the fraction ranges between 60 and 80 per cent). Whereas, the share of debt due to official creditors is much lower in East Europe and Latin America. If we consider the weighted average, only 30 per cent of the international public debt of Latin American countries is owed to official creditors. Most of the remaining 70 per cent which is owed to private creditors takes the form of sovereign bonds.
Table 1 DEBT INDICATORS IN DEVELOPING AND EMERGING COUNTRIES 1970–74 1975–79 1980–84 1985–89 1990–94 1995–99 2000–04 2005–08 1970–74 1975–79 1980–84 1985–89 1990–94 1995–99 2000–04 2005–08 All developing countries and emerging markets East Asia and Pacific Total External Debt (US$ billion) 99.3 284.2 676.0 1061.0 1468.0 2064.0 2352.0 3150.0 11.8 33.7 86.2 163.2 300.6 509.6 532.4 698.0 Total External Debt over GDP (per cent) 11.4 16.7 26.5 35.4 37.3 38.2 36.3 25.8 7.3 12.1 20.7 30.9 36.9 35.4 26.1 18.6 Total External Debt over GDP (per cent), simple average 23.4 35.4 55.9 87.7 90.6 79.5 78.9 58.4 26.3 26.8 37.2 60.1 71.5 62.5 61.5 50.1 Total Long Term PPG External Debt (US$ billion) 64.6 183.8 435.8 822.0 1091.0 1298.0 1364.0 1320.0 6.9 19.8 50.4 120.0 202.2 268.6 267.4 259.0 Total Long Term PPG External Debt over GDP (per cent) 7.4 10.8 17.1 27.3 27.8 24.1 21.1 11.3 4.2 7.1 12.1 22.7 25.0 18.7 13.2 7.2 Total Long Term PPG External Debt over GDP (per cent, SA) 18.5 27.1 41.5 70.1 74.8 62.0 59.8 40.7 13.3 15.2 22.3 48.4 57.9 45.9 44.4 29.2 Debt with official creditors over total Long Term PPG External Debt (per cent) 68.3 51.6 43.0 46.5 57.1 58.5 56.6 51.5 75.9 58.3 48.2 51.2 62.1 60.0 65.4 67.6 Multilateral debt over total debt with official creditors (per cent) 23.2 28.8 33.7 37.8 36.6 38.9 46.0 54.9 13.1 24.7 35.5 38.0 33.0 34.8 38.0 38.8 Bilateral debt over total debt with official creditors (per cent) 76.8 71.2 66.3 62.2 63.4 61.1 54.0 45.1 86.9 75.3 64.5 62.0 67.0 65.2 62.0 61.2 Debt with private creditors over total Long Term PPG External Debt (per cent) 31.7 48.4 57.0 53.5 43.0 41.6 43.5 48.6 24.1 41.7 51.8 48.9 37.9 39.9 34.6 32.4 Bonded debt over debt with private creditors 11.1 7.4 7.0 7.7 28.6 51.2 64.6 67.0 9.4 9.1 10.6 20.0 20.2 28.2 43.0 65.6 Bank loans over debt with private creditors 40.8 61.0 67.5 67.5 43.7 30.1 25.2 25.8 37.8 49.9 53.1 48.9 46.1 41.2 28.1 15.9 Debt with official creditors over total Long Term PPG External Debt (per cent, SA) 72.4 70.6 67.8 73.4 79.3 80.3 77.8 76.7 65.8 65.9 69.7 74.5 81.5 83.3 84.6 83.5 Eastern Europe and Central Asia Latin America and the Caribbean Total External Debt (US$ billion) 230.6 355.6 520.6 1068.0 46.6 134.0 320.4 415.6 483.8 684.2 779.2 789.8 Total External Debt over GDP (per cent) 23.6 38.5 47.5 39.0 20.5 28.6 46.3 56.0 38.8 36.9 41.6 25.8 Total External Debt over GDP (per cent), simple average 29.0 43.6 58.2 48.1 26.2 39.4 63.3 101.4 105.6 60.7 68.8 53.0 Total Long Term PPG External Debt (US$ billion) 185.0 242.4 256.0 260.8 24.0 77.4 185.4 315.6 331.4 375.4 423.2 405.8 Total Long Term PPG External Debt over GDP (per cent) 19.0 26.0 23.9 10.3 10.5 16.5 27.0 42.4 26.8 20.3 22.6 13.7 Total Long Term PPG External Debt over GDP (per cent, SA) 20.8 29.1 32.6 18.0 16.3 26.5 43.6 76.0 86.4 46.5 51.1 38.9 Debt with official creditors over total Long Term PPG External Debt (per cent) 47.8 55.9 51.3 32.2 45.0 28.9 22.0 27.2 40.2 37.4 33.8 31.1 Multilateral debt over total debt with official creditors (per cent) 18.5 18.9 28.5 57.2 38.9 41.3 47.3 52.1 47.5 55.3 70.6 78.5 Bilateral debt over total debt with official creditors (per cent) 81.5 81.1 71.5 42.8 61.1 58.7 52.7 47.9 52.5 44.7 29.4 21.5 Debt with private creditors over total Long Term PPG External Debt (per cent) 52.2 44.1 48.7 67.8 55.0 71.2 77.9 72.7 59.8 62.6 66.3 68.9 Bonded debt over debt with private creditors 14.1 36.5 69.2 75.4 12.4 9.1 9.4 7.7 49.5 81.7 79.6 72.7 Bank loans over debt with private creditors 50.6 42.3 23.8 22.1 50.7 72.5 79.1 81.0 40.5 13.9 18.2 25.9 Debt with official creditors over total Long Term PPG External Debt (per cent, SA) 69.0 70.3 70.0 70.9 58.2 56.2 55.8 62.4 70.6 70.3 58.5 54.9 Middle East and North Africa South Asia Total External Debt (US$ billion) 6.4 30.5 71.0 109.5 124.6 131.6 127.8 133.8 15.6 26.8 46.5 87.0 137.8 154.4 172.8 264.3 Total External Debt over GDP (per cent) 17.9 28.9 39.9 50.4 60.5 43.4 33.6 22.6 15.9 17.2 17.9 25.5 36.5 29.2 24.7 20.5 Total External Debt over GDP (per cent), simple average 22.4 39.5 55.9 74.5 82.6 71.6 54.9 42.2 20.3 24.4 24.7 39.3 46.2 43.9 44.4 40.1 Total Long Term PPG External Debt (US$ billion) 5.7 24.9 57.5 91.0 102.9 112.2 106.3 105.3 14.5 24.2 36.6 71.4 118.8 132.2 141.0 154.3 Total Long Term PPG External Debt over GDP (per cent) 15.7 23.7 32.4 41.9 49.9 37.0 28.0 17.8 14.8 15.4 14.1 20.9 31.5 25.0 20.2 11.9 Total Long Term PPG External Debt over GDP (per cent, SA) 23.5 39.3 46.3 63.8 69.7 53.5 43.8 35.4 18.0 20.1 19.4 33.3 41.5 40.1 40.5 35.3 Debt with official creditors over total Long Term PPG External Debt (per cent) 68.9 52.2 56.9 60.7 62.9 75.4 70.0 62.3 94.9 96.1 88.5 77.8 77.3 77.7 75.1 81.4 Multilateral debt over total debt with official creditors (per cent) 6.8 17.0 19.2 21.9 26.2 26.6 31.6 37.6 21.1 26.6 39.3 47.4 50.6 56.8 61.0 64.4 Bilateral debt over total debt with official creditors (per cent) 93.2 83.0 80.8 78.1 73.8 73.4 68.4 62.4 78.9 73.4 60.7 52.6 49.4 43.2 39.0 35.6 Debt with private creditors over total Long Term PPG External Debt (per cent) 31.1 47.8 43.1 39.2 37.0 24.9 29.9 37.7 5.1 3.9 11.5 22.2 22.6 22.3 24.7 18.7 Bonded debt over debt with private creditors 4.6 3.5 2.3 3.3 4.1 14.2 44.3 58.5 2.0 0.3 1.0 8.4 13.7 13.8 28.7 25.6 Bank loans over debt with private creditors 24.4 44.4 37.7 35.0 30.8 35.3 26.4 20.9 7.2 22.3 72.2 68.6 64.5 64.4 66.4 53.8 Debt with official creditors over total Long Term PPG External Debt (per cent, SA) 83.7 74.6 60.4 61.7 64.5 73.4 70.1 68.4 90.6 96.0 91.8 87.3 89.4 90.3 88.9 90.7 Sub-Saharan Africa Total External Debt (US$ billion) 11.0 32.9 76.8 136.4 191.2 226.4 218.0 195.8 Total External Debt over GDP (per cent) 21.9 35.8 62.6 101.0 115.5 122.7 112.8 76.5 Total External Debt over GDP (per cent), simple average 23.4 35.3 55.6 87.5 91.0 79.5 78.9 58.4 Total Long Term PPG External Debt (US$ billion) 9.2 24.2 54.2 109.6 151.6 167.0 171.2 136.0 Total Long Term PPG External Debt over GDP (per cent) 11.3 14.6 22.8 43.5 53.5 52.3 45.9 20.6 Total Long Term PPG External Debt over GDP (per cent, SA) 20.6 29.6 49.0 82.9 96.3 99.1 91.0 59.7 Debt with official creditors over total Long Term PPG External Debt (per cent) 72.2 65.2 62.3 69.8 78.1 80.6 83.5 76.7 Multilateral debt over total debt with official creditors (per cent) 20.9 26.9 30.8 33.9 37.0 40.9 43.8 51.1 Bilateral debt over total debt with official creditors (per cent) 79.1 73.1 69.2 66.1 63.0 59.1 56.2 48.9 Debt with private creditors over total Long Term PPG External Debt (per cent) 27.8 34.8 37.7 30.2 22.0 19.5 16.5 23.3 Bonded debt over debt with private creditors 14.6 3.8 2.1 1.4 6.6 22.1 34.8 27.6 Bank loans over debt with private creditors 19.0 36.0 47.6 37.4 34.7 34.4 37.9 58.2 Debt with official creditors over total Long Term PPG External Debt (per cent, SA) 77.5 75.2 74.5 83.0 88.6 89.9 90.7 89.5 9
Page 1: INTERNATIONAL GOVERNMENT DEBT No. 1
Page 4 and 5: ii The opinions expressed in this p
Page 7 and 8: INTERNATIONAL GOVERNMENT DEBT Ugo P
Page 9 and 10: Box 2 DOMESTIC AND INTERNATIONAL GO
Page 11 and 12: US$ billion 1 600 1 400 1 200 1 000
Page 13: Figure 2 EXTERNAL AND DOMESTIC GOVE
Page 17 and 18: 1990). 4 But again, this type of pu
Page 19 and 20: in most of these recent cases (Arge
Page 21 and 22: defaulters and the evidence on the
Page 23 and 24: Eaton J (1996). Sovereign Debt, Rep
Page 25 and 26: Sturzenegger F and Zettelmeyer J (2
Page 27 and 28: No. Date Author(s) Title 177 April

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