Challenges and Threats to the Debt Security of Central and Eastern European Countries

The study aims to identify the debt security weaknesses in the CEE countries and determine challenges and threats to the debt security of national economies and the CEE region. To achieve this goal, general and specific research methods have been used, including historical and logical methods, analysis and synthesis, structural and functional analysis, generalization and abstraction, a systematic approach, classification, and statistical methods. It is found out that the situation with debt security in the CEE region is quite controversial. The average external debt indicators of the CEE countries are in the unsafe zone, while the average solvency is at a relatively safe level. The analysis of external indebtedness and solvency indicators shows that the CEE group is highly heterogeneous regarding the level of countries’ debt security. Despite some improvement in the debt security of CEE economies during 2017–2019, the prospects for the development of the debt situation are rather vague. It is due to the growing impact of external challenges and threats to the debt security of the region, including the deterioration of the global economic environment and global recession, increase in credit risks and contraction in the international lending, global economic and political imbalances, and policy divergence, growing government spending on solving problems caused by the COVID-19 and corresponding pressure on public budgets, the general growth of global debt. Given the high heterogeneity of CEE countries in terms of current debt security, the manifestation of global challenges in each national economy can be rather diverse.

The evolution of China's monetary policy: on the horns of a dilemma

This paper explores the evolution of monetary policy at the People's Bank of China (PBoC) in the context of the distinct path China has adopted in fostering the international role of the renminbi. The paper highlights the challenges faced by the PBoC as it seeks to promote the use of the renminbi in international lending in particular, while simultaneously seeking to contain and discipline the inherent instability and potentially disruptive logic of finance. The problem it faces is not simply that of negotiating the impossible trinity, but rather the dilemma posed by its attempt to step out of the shadow of the US and forge an independent global role for the renminbi, while asserting control over the contours of its developing financial sector. The Chinese experiment tests the limits of the capacity of the state to tame finance.

Pakistan and the FATF: Exploring the Role of Diplomacy in Getting off the Grey List

Pakistan has been on the ‘Grey List’ of the Financial Action Task Force (FATF) – the international money laundering and terror-financing watchdog. Pakistan’s engagement with the task force is not new, the country faced FATF indictments during 2008 and 2012 to 2015. Despite Pakistan’s efforts to curb AML for CFT and huge diplomatic commitments, the task force retained Pakistan on the ‘Grey List’ on account of its Risk Profile. Though other countries get clearance after fulfilling 80 percent compliance but Pakistan has been pressurized for a hundred percent compliance with the action plan. There are severe drawbacks for being remained in the grey list for banking system, export and imports, remittances, international lending and foreign investments but the most severe would be its dropping into blacklist. The September, 2020 Legislation would help gathering diplomatic support in the forthcoming settings. The supportive role-played so for by China, Turkey, Malaysia at the task force has worked in averting Pakistan from blacklisting. Therefore, the study suggests that powerful diplomacy can break the FATF clutches and get Pakistan out of the ‘strategic deficiencies list’ or grey list. Explorative, historical and analytical conclusions have been brought in content analysis format.

Politics, International Banking, and the Debt Crisis of 1982

How does politics affect private international lending? This article highlights the relationship between international banks, their home governments, the International Monetary Fund (IMF), and international regulators during the years that preceded the debt crisis of 1982. Based on new archival evidence from different case studies, we find that the decisions of commercial banks to lend were largely based on the home governments’ preferences, competition, and the assumption that home governments and international organizations would provide lender of last resort functions to support borrowing governments. While previous works suggest the 1982 debt crisis was unexpected, we show that banks primarily reacted to the deteriorating macroeconomic situation in many emerging economies once the support of their home governments and the IMF became uncertain.

Reforming government public accountability: the case of Thailand

Purpose Public accountability was formally imposed on the Thai Government in 1997 when the World Bank compelled public sector reforms as a condition for bailing the country from bankruptcy. Despite regulating to promote public accountability for 20 years, the public accountability of Thai Government is still criticized as poor. However, the specific areas of public accountability needing improvement have not been clearly identified in Thailand. The purpose of this paper is to investigate how the Thai Government discharges its public accountability. Design/methodology/approach Prior literature supported annual reports as essential means by which public sector entities discharge their public accountability, and addressed the desirable aspects of reporting which permit the public’s monitoring of their government’s performance. That is: the account must be publicly accessible, timely, reliable and adequate. This paper evaluates the 2016 annual reports of the Thai Central Government departments against these aspects in tandem with the reporting regulations. Findings The results show that reliability and timeliness of annual report disclosures are the most problematic, followed by accessibility and adequacy. It was also found that the existing regulations provide only mild sanctions on government officers for their non-compliance. Further, statistical evidence suggests that larger departments report better on voluntary items than departments with smaller revenue. Originality/value These weaknesses of the reporting and regulations provide immediate suggestions for public policy regulators as to how to improve the Thai Government’s public accountability. These results are also expected to be useful to international lending institutions to be aware of particular issues when considering their foreign aid programs. Theoretically, the paper supports the necessity of public accountability mechanisms, in particular public sanctions, which need to be strong enough to motivate governments’ public accountability. It also highlights that public accountability aspects can be useful to measure or evaluating public sector reporting in emerging countries such as Thailand.