The Business Case
The recent debt crisis experienced by a number of European countries has highlighted once more the high economic and social costs of debt defaults and bailouts. Yet, in spite of recurrent debt crises since the 1980’s, no academic institution or professional body currently offers comprehensive postgraduate training in Public Debt Management (PDM).
This is a major gap. Over the past decades, PDM has evolved into a discipline in its own right combining elements of economics, finance, statistics, IT etc. and new guidelines and tools continue to be developed to assist countries better manage their borrowings.
Sound debt management not only prevents countries from falling into the debt trap. By ensuring that governments make optimum use of borrowed resources, debt management also helps countries alleviate poverty and achieve economic growth and social progress.
Importance of public debt management
Public debt is often the largest financial portfolio in a country. It is also a complicated one, comprising many different types of debt instruments, currencies, maturities, interest rates and associated risks.
Prudently managed, borrowed resources can significantly contribute to a country’s developmental efforts but poorly managed debt can lead to or help propagate severe financial and economic crises and shocks with high financial and social costs.
Public debt management is therefore an important policy tool - alongside fiscal, monetary and exchange rate policy - which concerns all countries (developing; emerging; developed)
Status of public debt management
Over the past 25 years, many countries have improved the environment for managing debt by updating relevant legislation; strengthening institutions responsible for PDM; installing computerised debt recording and management systems; training staff etc. A number of international and regional organisations have also helped establish better practices (see PDM publications page).
In the area of training, while short courses in certain aspects of PDM are available, there is no comprehensive training on offer. As a result, it can be argued that debt is still largely managed by “non specialists” e.g. economists, accountants etc. We believe that analytical capacity and the ability to develop and implement sound debt management strategies is still lacking in many countries.
Our research shows that there is no academic institution in the world to-day offering accredited postgraduate training in Public Debt Management. To fill this gap, the University of Mauritius and the Public Debt Management Pactice are collaborating to develop and offer the first Executive Master's Programme in Public Debt Management. Go to Project Proposal and subsequent pages to find out more about this exciting project.
Watch this interesting Wall Street Journal documentary on the European debt crisis.