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Regional: Debt Analytics and Technical Capacity Building

Sovereign (Public) Project | 53357-001 Status: Active

The knowledge and support technical assistance (KSTA) transfers knowledge and enhances technical capacity in the field of debt analytical methods and sustainability assessments in Asia and the Pacific. There are two components to the KSTA. The first, centered on data analysis and research, will assess debt sustainability across the Asian Development Bank Developing Member Countries (DMCs). In-depth thematic, empirical and country studies, with the involvement of leading international scholars and practitioners, will shed light on the main aspects of vulnerability in the region and discuss remedial policy options. These studies will then be published as an edited collection for release into the public domain and free dissemination among stakeholders. The second component of the KSTA will enhance debt-analytical capacity among DMCs. Knowledge will be transferred through training activities followed by on-site tutoring and support, to secure effective absorption and application of the knowledge transferred.

Project Details

Project Officer
Benno Ferrarini Economic Research and Regional Cooperation Department Request for information
Country
  • Regional
Sector
  • Finance
 
Project Name Debt Analytics and Technical Capacity Building
Project Number 53357-001
Country Regional
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9841-REG: Debt Analytics and Technical Capacity Building
Technical Assistance Special Fund US$ 1.50 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Sector / Subsector

Finance / Money and capital markets

Gender Equity and Mainstreaming No gender elements
Description The knowledge and support technical assistance (KSTA) transfers knowledge and enhances technical capacity in the field of debt analytical methods and sustainability assessments in Asia and the Pacific. There are two components to the KSTA. The first, centered on data analysis and research, will assess debt sustainability across the Asian Development Bank Developing Member Countries (DMCs). In-depth thematic, empirical and country studies, with the involvement of leading international scholars and practitioners, will shed light on the main aspects of vulnerability in the region and discuss remedial policy options. These studies will then be published as an edited collection for release into the public domain and free dissemination among stakeholders. The second component of the KSTA will enhance debt-analytical capacity among DMCs. Knowledge will be transferred through training activities followed by on-site tutoring and support, to secure effective absorption and application of the knowledge transferred. Drawing on an international pool of leading experts, capacity building will be tailored to meet local circumstances and demands, which the KSTA will identify in consultation with DMC stakeholders, ADB regional departments and international partner organizations, and meet within the limits of the TA budget.
Project Rationale and Linkage to Country/Regional Strategy Mounting debt ratios worldwide have refocused policymakers'' attention onto debt sustainability and the challenges a global debt overhang entails. Across DMCs, the ratio of total debt to GDP has grown to 212% by 2017, or two-thirds in the past decade alone, mainly on account of surging private debt. One such challenge are contingent liabilities of highly leveraged households and non-financial corporations, which may result from shocks such as a sharp hike in effective interest rates or a drop in mortgage values. Policymakers in the region have been well aware of these risks and responded by tightening credit channels, for example through curbs on mortgage loans and shadow banking. However, softening growth in the global economy and other headwinds have recently forced a return to a looser policy stance. The latest data show that upward pressure on household and corporate sector leverage has returned after a two-year hiatus, and total debt ratios are peaking as a result. Another reason for concern is slowing growth and rising fiscal pressures, pushing up public debt ratios. Policymakers should not be complacent, especially in economies susceptible to exogenous price shocks, intensifying risks of disasters, capital flight, reserves erosion, or with debt profiles complicated by currency or term mismatches. Further difficulties stem from a shift in countries'' borrowing portfolios towards new creditors, both sovereign and commercial, in a departure from the traditional pattern of concessionary debt owed mostly to the multilateral and bilateral community of donor countries. While international efforts are seeking to achieve fuller disclosure and transparency of debt over the longer term, immediate opportunities exist to more thoroughly mine the available data and information for a more comprehensive picture about portfolio debt flows and loans from and to the region. Against this shifting backdrop, analysts and policymakers often find themselves ill-equipped with the analytical tools and knowhow necessary to effectively assess risk in the context of debt management and policy surveillance. Limited capacity to assess debt sustainability leaves credit risks unaccounted for, undermines debt management, and heightens the probability of adverse developments and debt crises in DMCs. The KSTA endeavors to counter this risk by narrowing the knowledge gap through the targeted transfer of analytical capabilities and knowhow where they are needed most.
Impact DMCs' debt sustainability improved
Project Outcome
Description of Outcome DMCs' capacity to assess debt sustainability strengthened
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Research outputs on debt sustainability in Asia disseminated

Technical capacity building on debt analytics and sustainability assessment methods delivered

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Regional
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services ADB will engage the consultants following the ADB Procurement Policy (2017, as amended from time to time) and its associated project administration instructions and/or staff instructions. Up to 10 individual international consultants will be engaged for the research project to prepare analytical, country, and case studies involving debt analytics in Asia. One national consultant will be hired to assist with data collection and analysis. For capacity building activities, the TA will engage two or more individual international consultants to support on-site activities and one national consultant to coordinate training. ADB will engage experts, which could include ADB staff, as resource persons to produce knowledge products and facilitate training. Engaging individual consultants will provide more benefits to ADB than engaging a firm because the experience and qualifications of individual experts on debt analytics are of crucial importance to the implementation of the TA. It would also be difficult to find a firm that specializes in the field of debt sustainability assessments in Asia.
Procurement The purchase of information and communication technology-related equipment, supplies, econometric or statistical programs and/or software, and data subscription and/or purchase will follow the ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). Where applicable, the TA team will coordinate with ADB''s Procurement, Portfolio and Financial Management Department and Office of the General Counsel before purchasing datasets and signing data use agreements with DMC statistical agencies and third-party database providers. The TA team will also consult ADB''s Office of Information Systems and Technology and Office of Administrative Services in relation to the purchase of information communication technology hardware and software. After the TA is completed, the TA team will dispose of any procured equipment in compliance with the project administration instructions on administering grant-financed TA projects. Disbursements under this TA will be made in accordance with ADB''s Technical Assistance Disbursement Handbook (2010, as amended from time to time).
Responsible ADB Officer Benno Ferrarini
Responsible ADB Department Economic Research and Regional Cooperation Department
Responsible ADB Division Office of the Chief Economist, ERD
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Timetable
Concept Clearance 17 Sep 2019
Fact Finding 01 Oct 2019 to 31 Oct 2019
MRM -
Approval 30 Oct 2019
Last Review Mission -
Last PDS Update 07 Nov 2019

TA 9841-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Oct 2019 - 30 Oct 2019 31 Oct 2022 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,500,000.00 0.00 0.00 0.00 0.00 0.00 1,500,000.00 30 Oct 2019 0.00

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Related Publications

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Procurement Plan