Background and Information

Increasing levels of domestic debt, as a ratio of Gross Domestic Product (GDP), in a number of MEFMI member states, has led to concerns regarding sustainability of fiscal policy and associated macroeconomic effects of debt. These include the crowding of private sector investment caused by high interest rates, low economic growth and financial disintermediation. Consequently, MEFMI undertook a study between 1998 and 2000 with the aim of developing an appropriate methodology for assessing the sustainable level of domestic debt. The methodology developed in the MEFMI study (2001), recognizes that fiscal policy is a dynamic concept. Using UNITAR’s experience and pedagogical approach, this methodology has been adapted into an e-Learning course with a view to sharing it with debt managers and central bankers from MEFMI member states as well as creating regular discussion groups around the theme of ‘domestic debt sustainability’ using new information and communication technologies.

The methodology of analyzing domestic debt sustainability is based on plausible theoretical foundations and has been used in a number of other studies. Unlike some other methodologies whose point of departure is a non-increasing debt as a condition for sustainability, the methodology proposed in this e-Learning course recognizes that the sustainability of fiscal policy refers to the ability of countries to generate future primary surpluses that exceed primary deficits to be able to extinguish the terminal debt stock. The beauty of this methodology is that it can be used to assess the sustainability of future government fiscal plans. It uses Time Series data (both historical and future projected) and is based on the concept of co-integration. If a country generates enough surpluses in future to pay the current debt stock and future deficits so that the terminal debt stock is zero, then the budget balance (deficit or surplus) is mean reverting (stationary) and government expenditure and revenue are co-integrated with a co-integrating vector (1, -1).

After the successful completion of the study, MEFMI organized two country specific workshops to operationalise the methodology. From these workshops, it became clear that there was a need for a training manual. In order to meet its objective of strengthening member states’ capacity towards public domestic debt management, MEFMI therefore organized a retreat on “Public Domestic Debt Sustainability Analysis (DDSA) Training Manual” at its Secretariat in May, 2003 to develop a Training Manual for DDSA that should provide future reference and standardize training in member states in DDSA. The manual has now be adapted into an e-Learning course addressed specifically to debt and finance managers from MEFMI member states.

At a Glance 
  • Course Title: Domestic Debt Sustainability Analysis (DDSA)
  • Course Dates: September 13 to November 19, 2010
  • Application Status: Open
  • Course Duration: 10 weeks (including case study) 
  • Estimated total Learning time: Minimum 40 hours 
  • Number of Participants: Up to 90 
  • Format: Online/Internet-based (asynchronous, instructor-led) 
  • Language of Instruction: English
  • Target Audience: Ministry of finance and/or planning and central bank officials who are involved in public debt management, budget/fiscal analysis or macroeconomic research and policy analysis. An academic background in economic and statistical analysis would be an added advantage with this target group.
  • Participant selection and fees: This course will be free of charge for selected officials from MEFMI Member States. Officials from Non-members of MEFMI will be charged a participation fee of US$ 400.
  • Enquiries: For more information about this course, please contact us at or 
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