INTRODUCTION

The United Nations Institute for Training and Research (UNITAR) saw a natural opening in the field of training in debt management when the Third Extraordinary Assembly of the Organization of African Unity (OAU) Heads of States and Governments stated (Abuja, 1987) that new and bold initiatives would have to be taken by the creditor community in order to enable countries of the region to implement programmes for economic recovery and appealed to donors to provide technical assistance and counselling services to OAU member countries in order to facilitate their choices of financial and monetary policies to remedy the current crises.

Along with other entities, UNITAR contributed towards seeking and formulating practical solutions to external debt problems. What emerged was that effective debt management should be based on the following six priorities:

a. Formulation of a realistic debt management strategy.

b. Identification of sources of loans and the elaboration of a negotiation strategy for each borrower country concerned.

c. A precise determination of the amount involved in the debt servic-ing obligations and of possible sources of financing to meet those obligations.

d. The elaboration of data collection, follow-up and evaluation methods at country, sub-regional and African regional level, including the preparation of reliable statistics on external debt.

e. Improved capacities for negotiation with creditors.

f. Improved technical and external debt management capacities.

It was felt that a reform of debt management structures is essential if management is to be improved. Such a reform must necessarily go hand in hand with an improved level of service in debt managing administra-tions by means of systematic vocational training.

UNITAR's training programme in debt management has had both an awareness-building and a training element. Furthermore, UNITAR believes that debt management begins at the moment when sovereign as well as private potential borrowers contemplate the various options before them. Decision makers need to have at their disposal all the relevant resources including facts, figures and advice to ensure reduced cost of external loans and increased level of profitability for projects financed, wholly or in part, from external sources. The improvement and strengthening of debt manage-ment capacity is an essential component in the achievement of this objective.

UNITAR's contribution to solutions to the problem of external debt management took a concrete form through a feasibility study financed by the Directorate of Development Cooperation (DDA) of the Swiss Federal Department for Foreign Affairs, which culminated in Geneva in April 1987 in a high-level expert meeting. The experts' recommendations placed emphasis on practical activities in the training and further training of national debt managers in African countries through a regional approach.

The present compilation contains summaries of presentations made by various UNITAR resource persons having extensive theoretical and prac-tical experience in the field of debt management. The topics dealt with in this compilation include:

1. External debt, public finance, and the balance of payments by Ms. Jocelyn Horne.
2. External debt and the development process by Mr. Ishrat Husain.
3. Requirements for effective debt management by Mr. Nihal Kappagoda.
4. Legal aspects of external debt management by Professor Rolf Knieper.

We hope that this publication is useful to the readers.


Marcel A. Boisard
Director, UNITAR European Office

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