Monterrey Consensus - Debt Sustainability Commitment

Event/initiative: 
Date of commitment: 
March 2002
Millennium Development Goal: 
Recipient: 

Commitment

Emphasized “the importance of putting in place a set of clear principles for the management and resolution of financial crises that provide for fair burden-sharing between public and private sectors and between debtors, creditors and investors”. They also encouraged “exploring innovative mechanisms to comprehensively address debt problems of developing countries”.
It was further reiterated that continued efforts are needed to reduce the debt burden of HIPCs to sustainable levels, and that debt sustainability analyses should take into account the impact of debt relief on progress towards achieving the MDGs and any worsening global growth prospects.

Target

No numerical targets were set.

Progress

  • Despite recognition of the need for an international debt restructuring mechanism, no actions have been taken to create such a mechanism since the unsuccessful outcome of the discussions on this issue since 2003.
  • In the aftermath of the global economic crisis, more flexibility was introduced to the debt sustainability framework by adjusting the borrowing limits.

Gap

  • The world lacks a comprehensive debt workout mechanism within which to treat sovereign debt crises adequately.
  • The debt sustainability analyses do not take into account the impact of debt relief on the achievement of the MDGs.

Additionality