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Linking Social Development with the Capacity to Carry Debt: Towards an MDG‐Consistent Debt‐Sustainability Concept
Author(s) -
Gunter Bernhard G.,
Rahman Jesmin,
Shi Haiyan
Publication year - 2009
Publication title -
development policy review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.671
H-Index - 61
eISSN - 1467-7679
pISSN - 0950-6764
DOI - 10.1111/j.1467-7679.2009.00446.x
Subject(s) - debt , sustainability , carry (investment) , external debt , internal debt , economics , millennium development goals , debt levels and flows , debt to gdp ratio , sustainable development , business , development economics , developing country , macroeconomics , economic growth , political science , ecology , law , biology
Owing to concerns among low‐income countries that the new debt sustainability framework of the Bretton Woods institutions may lock them into a so‐called ‘low debt‐low growth’ scenario, the United Nations has called for a more MDG‐consistent debt‐sustainability concept. This article shows that there is a robust relationship between achieving the Millennium Development Goals and having a higher capacity to carry debt. It then discusses options for modifying the current debt‐sustainability framework, and suggests that including progress made in achieving the MDGs in determining borrowing limits would be a first step towards adopting such a concept.