Domestic insolvency law treatment

The Territory's foreign debt stood at 50 million, while the domestic debt was estimated at 40 million.5

Poverty increased, the currency suffered repeated devaluations, foreign and domestic debt registered an increase and the growth rate of the economy fell.

Therefore, only current maturities and arrears were treated, and an agreement was reached that the consolidated amounts would be reimbursed over a period of 14 years, including a grace period of three years.

Welcoming also the actions taken by creditor countries within the framework of the Paris Club and by some creditor countries through the cancellation of bilateral debts, and urging all creditor countries to participate in efforts to remedy the external debt and debt servicing problems of developing countries,

So, if internal devaluation is to work, the value of debts, where they already represent a heavy burden, must be reduced. Government debt must be restructured.

To the extent that the value of the encumbered asset is insufficient to satisfy the secured creditor's claim, the secured creditor may participate as an ordinary unsecured creditor.

For starters, when it comes to public debt, there is a big difference between the gross and net figures. While Japan s gross public debt, for example, is a massive 246 of GDP, the net figure, accounting for intra government debts, is 127 of GDP.

An integrated asset liability structure is needed that also encompasses domestic debt and off balance sheet items.

Welcoming also the actions taken by creditor countries within the framework of the Paris Club and by some creditor countries through the cancellation of bilateral debts, and urging all creditor countries to participate in efforts to remedy the external debt and debt servicing problems of developing countries,

Senegal also reached the completion point in April 2004, and in June 2004 during a meeting of the Paris Club, creditors agreed to cancel US 94 million of Senegal's debt in net present value terms.

The termination of recognition shall refer to the writing off the financial asset or financial liability from the account or balance sheet of the enterprise concerned.

In November 2001, the authorities again restructured the public debt, this time exchanging dollar denominated bonds for domestic guaranteed loans.

Third, while pesification removes balance sheet losses from domestic foreign currency debts, external contractual obligations cannot be redenominated unilaterally. Thus, the exit from the dollar peg requires a restructuring of external debt, both sovereign and corporate.

In the area of debt relief, much progress has been made in the framework of the Heavily Indebted Poor Countries (HIPC) Initiative, but a bit more remains to be done to achieve the sustainability of debt, which is equivalent to 150 per cent of exports.

Bond lending involves diversified groups of bond holders, including domestic residents, and can be issued under different jurisdictions.

Until the late 1990 s and the advent of monetary union, most government debt in the European Union was domestically held in 1998, foreigners held only one fifth of sovereign debt. That share climbed rapidly in the aftermath of the euro s introduction.

So far, the country has not experienced a debt crisis, and interest rates remain exceptionally low, at around 1 . The reason is obvious Japan has run sizeable current account surpluses for decades, giving it more than sufficient domestic savings to absorb all of its public debt at home.

Owing to strong GDP growth, the debt to GDP ratio decreased from 100.2 per cent to 95.1 per cent.

In Saudi Arabia, the most highly indebted country of the Gulf Cooperation Council, total government debt increased to some 75 per cent of GDP in 2003 however, only some 23 per cent of total debt is owed to external creditors.

Welcoming also the actions taken by creditor countries within the framework of the Paris Club and by some creditor countries through the cancellation of bilateral debts, urging all creditor countries to participate in efforts to remedy the external debt and debt servicing problems of developing countries, and noting the Evian Approach of the Paris Club of October 2003 and that debt relief does not replace alternative sources of financing,

24. Welcomes the actions taken by creditor countries within the framework of the Paris Club and by some creditor countries through the cancellation of bilateral debts, urges all creditor countries to participate in efforts to remedy the external debt and debt servicing problems of African countries, notes the Evian Approach of the Paris Club of October 2003, and also notes that debt relief does not replace alternative sources of financing

In addition to estimating financing gaps and identifying the sources of financing (including different scenarios of debt rescheduling), DSA includes an analysis of debt dynamics to determine the stability of debt to GDP or debt to government revenue ratios.

UNCTAD has continued to provide support to African and other debtor countries in preparing their negotiations on the rescheduling or restructuring of bilateral official debt in the framework of the Paris Club.

Furthermore, while debt relief for HIPC countries was welcome, the majority of the world's poor resided in other developing countries, many of which were middle income States also facing heavy debt burdens.

However, total domestic debt increased substantially in 2004, reaching 433.8 billion Egyptian pounds (LE) in September 2004, or 87.1 per cent of GDP.

This year, Russia intends to announce the cancellation of 2.2 billion for the poorest African States, on a bilateral basis within the framework of the Heavily Indebted Poor Countries Debt Initiative.

(f) To encourage exploring innovative mechanisms to comprehensively address the debt problems of developing countries, including middle income countries, and countries with economies in transition such mechanisms may include debt for sustainable development swaps, or multi creditor debt swap arrangements, as appropriate

(f) To encourage exploring innovative mechanisms to comprehensively address the debt problems of developing countries, including middle income countries, and countries with economies in transition such mechanisms may include debt for sustainable development swaps, or multi creditor debt swap arrangements, as appropriate

We intend to promote new efforts in matters of foreign debt that transcend our bilateral obligations in the framework of the Heavily Indebted Poor Countries (HIPC) Debt Initiative and to contribute decisively to the solution of the problem of the external debt of these countries with the multilateral financial institutions.

UNCITRAL has a proven track record in insolvency law work, developing both the Model Law on Cross Border Insolvency and the Legislative Guide on Insolvency Law in comparatively short periods of time.

19. Invites creditors and debtors to continue to use, where appropriate and on a case by case basis, mechanisms such as debt swaps for alleviating the debt burden of low and middle income developing countries with an unsustainable debt burden that are not eligible for the Heavily Indebted Poor Countries Initiative, and takes note of the discussions and assessment by the Paris Club of the proposal for Debt for Equity in Millennium Development Goal Projects

Mention is not made of other low income countries not included in the HIPC Initiative which might need full debt cancellation to reach their Millennium Development Goals.

This is one of a number of options for relieving external debt burdens in poor countries, including debt cancellation, in order to free resources for investments in essential infrastructure and services.

Even for those benefiting from the HIPC Initiative, the economic conditions on which their debt relief was based have considerably worsened, and several countries, including those few that received debt relief, have backtracked into further unsustainable debt.

23. Urges the Government of the Democratic Republic of the Congo to implement national comprehensive strategies to monitor and manage external liabilities, embedded in the domestic preconditions for debt sustainability, including sound macroeconomic and public resource management

The Government of Jordan continued its efforts to restructure the public debt stock, gradually replacing external by domestic sources with the external debt to GDP ratio declining from 76.4 per cent to 69.7 per cent during 2003 2004.

1. Except as otherwise provided in this Convention, an assignment does not, without the consent of the debtor, affect the rights and obligations of the debtor, including the payment terms contained in the original contract.

The debt burden adjustment should be retained as an element of the scale methodology because external debt had a substantial impact on Member States' capacity to pay.

In this regard, the task force deems it necessary to define debt sustainability within a State context with a view to attaining a level of debt that allows countries to achieve the Goals and avoid an increase in debt ratios by 2015.

Management continues to pay close attention to the amounts recorded as unliquidated obligations throughout the year.

The low return on investment and slow export growth in landlocked developing countries have been key causes of the build up of an unsustainable external debt with an external debt to export ratio of 221 per cent and an external debt to GDP ratio of 67 per cent in 2003 against ratios of 106 per cent and 36 per cent, respectively, for developing countries as a whole in the same year (see tables 3 and 4).

This distinction between foreign and domestic debt is particularly important in the context of the euro crisis, because eurozone countries cannot devalue to increase exports if this is required to service foreign debt. And the evidence confirms that the euro crisis is not really about sovereign debt, but about foreign debt.

It follows that debt sustainability should be part of the overall development strategy of a country, addressing debt, trade and finance in a coherent framework.

As a result of greatly expanded GDP in 2004, the public debt to GDP ratio declined slightly, to 180 per cent, but is still very high.