A principled approach to domestic debt restructuring

The briefing argues that while external debt restructuring has established frameworks, domestic debt restructuring lacks guiding principles, often leaving the process to be dominated by the strongest political voices, typically foreign creditors. It proposes that DDR be integrated into domestic adjustment programs with full consultation and ownership, and that its implementation be based on rigorous cost-benefit analyses anchored in Debt Sustainability Analyses. The author emphasizes that the primary goal of any DDR should be the protection of long-term economic growth and poverty reduction gains, ensuring that the burden of adjustment is shared fairly between domestic and foreign creditors to avoid macroeconomic or social 'doom-loops'.

• Domestic debt restructuring (DDR) currently lacks a practical guide or consensus on sequencing and parameters, unlike External Debt Restructuring (EDR) which utilizes frameworks like the Paris Club and the Common Framework.
• The absence of guiding principles for DDR often results in political dominance by the most influential stakeholders, who are frequently foreign creditors.
• The document proposes two specific reforms for DDR: it should be treated as an integral part of domestic adjustment programs with the same level of ownership as other policies, and its costs should be determined via cost-benefit analyses anchored in Debt Sustainability Analyses.
• The Global Sovereign Debt Roundtable (GSDR), established in early 2023 by the IMF, World Bank, and Indian G20 presidency, serves as a platform for debtor countries, including Ecuador, Ethiopia, Ghana, Sri Lanka, Suriname, and Zambia, to discuss restructuring processes.

APA

Moors, R. (2023). A principled approach to domestic debt restructuring. African Center for Economic Transformation. https://acetforafrica.org/research-and-analysis/insights-ideas/articles/a-principled-approach-to-domestic-debt-restructuring/

Chicago

Moors, Rik. A principled approach to domestic debt restructuring. African Center for Economic Transformation, 2023. https://acetforafrica.org/research-and-analysis/insights-ideas/articles/a-principled-approach-to-domestic-debt-restructuring/.

Wikipedia

{{cite report |last1=Moors |first1=Rik |title=A principled approach to domestic debt restructuring |publisher=African Center for Economic Transformation |date=12 October 2023 |url=https://acetforafrica.org/research-and-analysis/insights-ideas/articles/a-principled-approach-to-domestic-debt-restructuring/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{moors2023principled, author = {Moors, Rik}, title = {{A principled approach to domestic debt restructuring}}, institution = {African Center for Economic Transformation}, year = {2023}, month = oct, url = {https://acetforafrica.org/research-and-analysis/insights-ideas/articles/a-principled-approach-to-domestic-debt-restructuring/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }