2023-06-14 13:00:00
A single country’s risk might also affect the stability of other countries in the region.
Although there is a way to makepay off debtby adjusting the debt But debt obligations will still affect long-term investment expenditures. This will affect projects that yield long-term returns.
especially various projects to support the achievement of goalssustainable developmentof the United Nations (Sustainable Development Goals – SDGs)
UN-ESCAP estimates that annual investment will be more than US$1.7 trillion between 2019 and 2030.public debtis high, the likelihood that these projects will not receive funding is high and make it impossible to achieve the set goals
Raising this issue to discuss during this period is a good time to resolve a long-standing problem. The question is how to use the national budget today. Is it appropriate for the country’s long-term development goals?
This report highlights several key issues that should be considered in conjunction with other proposals.fiscal discipline such as the credibility and effectiveness of policies. including the fiscal management system of each country
which may be seen from the level of credibility offoreign debt assessed by the credit rating agency ofpublic loanof various countries by independent international institutions including Moody’s S&P and FITCH.
From this table, it can be seen that bonds of many ASEAN countries are classified as Non-Investment Grade means not suitable for investment byThailandClassified as investment grade B, which is lower than Malaysia, Vietnam, Cambodia and Laos. The score has decreased from last year.
This report gives several suggestions to solve the problem. In the short term, negotiations with creditors are required to ensure fairness to both debtors and creditors.debt restructuring includingSuspend debt paymentor forgive the debt
At the same time, new methods or measures must be found to raise money to support long-term development projects, such as extending the loan period for projects related to SDGs, improving the fiscal system to be more efficient.
Involving the private sector in long-term project implementation just like howMongoliain progress By allowing the private sector to become a creditor and jointly manage the public debt.
Since most countries in the Asia-Pacific region are developing countries and are medium or small. Therefore, there should be at least two additional considerations:
1. Cooperation in negotiations with creditors and joint borrowers
Due to the small size of Asian countries and many countries having a contiguous area. There are related loan projects such as basic construction projects in transportation and transportation, etc., and may also have the same creditors.
In such a caseDebtor countriesshould join together in debt restructuring negotiations because it will have more bargaining power than separately negotiating Creditors can also save time and money by separating negotiations with each country. Therefore, it is beneficial to both debtors and creditors.
But international coordination is a delicate matter. Because each country may have restrictions on the laws of each country. as well as other problems, so there may be intermediary Let’s facilitate and create proposals that each party can accept together.
indebt adjustment Borrowing together as a group should also be considered because debt problems are often caused by the weakness of the system for monitoring and evaluating the progress of projects that borrow money for investment.
because it is a small project (From the lender’s point of view) the cost of monitoring the oversight is high. (compared to money) “Joint loan” It will allow borrowers to take care of each other, which will reduce the cost of monitoring and supervision of creditors. And the efficiency of loan management will increase.
Rural lending, for example, faces the same problem. because there are many small borrowers Debt collection supervision per person therefore has a high cost. Nowadays, both public and private financial institutions tend to use the “co-borrowing” method for lending.
Professor Yunus which won the Noble Prize for rural social development, suggests that “collaboration” not only teaches and creates financial discipline among group members As a by-product, community cooperation in other areas will follow.
such as community investment planning Especially economic activities and when the community economy is stronger. Investment in social activities will follow. It is the foundation for sustainable development of members both at the community and national levels.
2. The development of the capital market money market will increase the potential of the private sector and perform more functions that the government sector previously performed.
Nowadays, the world’s money and capital markets have developed a lot over the past 20 years, partly due to better communication systems. causing the number of people to have access to money and capital markets more The monitoring system is cheaper and better.
meanwhile The fiscal environment has changed a lot. The activities that the state undertakes in four main areas are defense, education, health and investment.infrastructure which consumes almost the entire budget It should consider what the role of the government in the future should be.
such as spending on education, health care, and building infrastructure. What role should the public sector play in order to be most beneficial and how will the private sector play a greater role?
If the government continues to operate in the same way will becomemarket interventionUnnecessarily, the government sector focuses on acting as a direction and supervision to achieve the goals.
This approach will allow the government to spend more money on essential matters. benefit more than In particular, investment to solve long-term problems in which the private sector may not be ready to become an investor.
Restructuring budget expenditures for efficiency Therefore, it is a matter that must be considered first. because it gives the government revenue that can be used for long-term investment such as more SDGs
In addition, in the past few years, market instability caused investors to reduce their risks. by reducing investment and turning to hold a lot of cash, especially innew millionaire groupThat happened during the economic boom of the past 10-15 years, where these cash are seeking new investment opportunities.
The private sector itself was not indifferent.Impact Venture Fund These funds are looking for projects that do not have a measurable impact on the environment and society. And make profits without having to have high profits like general investments
It is estimated that the impact investment will increase from 420,910 million US dollars in 2022 to 495,820 million this year. and has an average growth rate of 17.8% per year, which will increase to 955,950 million US dollars in 2027.
From a survey of Fidelity Charitable In the US, of the 1,200 investors, 60 percent are from millennials (aged 27-42), with most of the funding coming from investors in developed countries such as the US and Europe. For funds from Thailand, most of them will be invested in Asia and the Pacific such as Australia, Indonesia, China and India, etc.
Therefore, designing long-term investments in relation to the SDGs to incentivize owners of these funds is an opportunity for governments to consider. And use this rhythm to draw money to invest in activities that will benefit society in the long term.
In summary, although Thailand is not classified as a country that will havefiscal crisis But Thailand should use this moment to review.fiscal policy and improve the management system to be ready to cope with the rapidly changing future
by urgently discussing withneighboring countrieswith related projects to jointly borrow and negotiate with interested investors And create an atmosphere that is conducive to investment in creating a new environment and society that will support what is happening in the future.
1686754987
#issue #public #debt #sustainable #development #Asia
