Lending to the Poorest Countries [E-Book]: A New Counter-Cyclical Debt Instrument / Daniel Cohen ... [et al]
One of the particular features of poor countries’ economies is their volatility, due mostly to their dependence on commodities. The paper shows that this volatility is a prime factor behind the debt crises of the poorest countries. It advocates the adoption by donors of a new lending instrument: the...
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Full text |
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Personal Name(s): | Cohen, Daniel. |
Djoufelkit-Cottenet, Hélène. / Jacquet, Pierre. / Valadier, Cécile. | |
Imprint: |
Paris :
OECD Publishing,
2008
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Physical Description: |
45 p. ; 21 x 29.7cm. |
Note: |
englisch |
DOI: |
10.1787/242606541087 |
Series Title: |
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OECD Development Centre Working Papers ;
269 |
Keywords: |
Development |
One of the particular features of poor countries’ economies is their volatility, due mostly to their dependence on commodities. The paper shows that this volatility is a prime factor behind the debt crises of the poorest countries. It advocates the adoption by donors of a new lending instrument: the countercyclical loan (CCL). The key idea is to reduce the grace period of a typical concessional loan, from 10 to 5 years, and to keep the remaining grace periods as an asset that the country can draw upon, when a bad shock occurs. If no such bad shocks happen, or infrequently enough, the "floating grace" is redeemed to the country at the end of the loan as a repayment in advance without penalties. |