Erlassjahr.de – Entwicklung braucht Entschuldung, Carl-Mosterts-Platz 1, 40477 Düsseldorf The Case of Grenada Buenos-Aires March 19th 2014.

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1 erlassjahr.de – Entwicklung braucht Entschuldung, Carl-Mosterts-Platz 1, 40477 Düsseldorf The Case of Grenada Buenos-Aires March 19th 2014

2 Over-indebted at first sight Public debt to GDP end-2012 stood at 110% Public Debt Service due in 2013 is41% of total public expenditure or slightly more than 100% of total non-grants revenue. Grenada is considered as being at “high risk of debt distress” under the regular IMF assessment, With only 22% of all public debt being domestic Grenada is relatively more indebted to external creditors than peers such as Jamaica Debt stock to exports has been around 300% ever since 2008. Total external debt service to exports has been kept below 15% until 2011 because of the strong average grant element of the external debt stock. In 2012 it jumped to over 20%. erlassjahr.de – Entwicklung braucht Entschuldung, Carl-Mosterts-Platz 1, 40477 Düsseldorf

3 The Options Benchmarks derived from historical experiences –HIPC and DSA thresholds Considering the debt-growth nexus A successful debt reduction: The London debt Accord of 1953 Factoring in development finance priorities Considering specific Vulnerabilities erlassjahr.de – Entwicklung braucht Entschuldung, Carl-Mosterts-Platz 1, 40477 Düsseldorf

4 Results Overview erlassjahr.de – Entwicklung braucht Entschuldung, Carl-Mosterts-Platz 1, 40477 Düsseldorf ConceptIndicatorActual level 2012Sustainable LevelSuggested debt reduction in % HIPC-ComparabilityEDT/XGS327.6%150%48% Debt Sustainability Framework TDS/XGS20.1 %15%25% Debt Sustainability Framework Public Debt Service /Revenue 39.8%20%50% London Debt AccordTDS/XGS20.1%3.4%84% “Natural Debt Limit”Public Debt / GNI101.2%6.3%95% Debt-Growth Nexus acc. to Greenidge et alia Public Debt / GNI, maximum marginal growth effect 110.1%30%73% Debt-Growth Nexus acc. to Greenidge et alia Public Debt / GNI tipping point 110.1%55%50% Debt Growth Nexus acc. to Reinhard/Rogoff EDT/GNI75.160%25% ECCB Indicative threshold Public Debt/GNI110.1%60%45%

5 Vulnerabilities erlassjahr.de – Entwicklung braucht Entschuldung, Carl-Mosterts-Platz 1, 40477 Düsseldorf

6 You never know, how much is enough – unless you know how much is more than enough William Blake: The Marriage of Heaven and Hell erlassjahr.de – Entwicklung braucht Entschuldung, Carl-Mosterts-Platz 1, 40477 Düsseldorf