Theory, Practice and Potential of Debt for Development Swaps in the Asian and Pacific Region

Posted: 4 Mar 2007

See all articles by Danny Cassimon

Danny Cassimon

University of Antwerp - Institute for Development Policy and Management

Jos Vaessen

Maastricht University - Institute of Development Policy and Management

Abstract

This paper discusses to what extent debt relief embedded in debt swaps linked to development can be helpful in reaching development goals such as the Millennium Development Goals. A range of historical and current international debt relief practices and proposals is assessed on the basis of their ability to generate additional resources and their effectiveness in channeling these resources towards development by ways of earmarking. It is argued that traditional debt for development swaps, because of their marginal and micro-earmarked nature, are less efficient and effective then larger scale operations such as those that are linked to the PRSP ("debt for PRSP swaps") as in the HIPC initiative and recent extensions. Observing that current practice largely bypasses the Asian and Pacific countries, we finally assess to what extent there is an untapped potential to promote debt swaps for this region.

Keywords: Debt swaps, HIPC, Debt relief, MDG, Poverty

JEL Classification: F34, F35, O11, O19

Suggested Citation

Cassimon, Danny and Vaessen, Jos, Theory, Practice and Potential of Debt for Development Swaps in the Asian and Pacific Region. Economic Systems, Vol. 31, No. 1, March 2007, Available at SSRN: https://ssrn.com/abstract=967680

Danny Cassimon (Contact Author)

University of Antwerp - Institute for Development Policy and Management ( email )

Prinsstraat 13
Antwerpen, B-2000
Belgium

Jos Vaessen

Maastricht University - Institute of Development Policy and Management ( email )

Minderbroedersberg 4 6211 LK
Maastricht, 043 38822
Netherlands

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