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Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 

Give Us the Courage to Change the Things We Can

Rory Stewart MP gave a wise speech about how Britain can play a role in global peace and stability. In my brief response to the Minister, I suggested twelve policies which are within our control which would help create conditions for stronger, more peaceful, more prosperous countries to thrive, and so reduce the risks of future conflict and instability. Here they are.

The Lingering Effects of the U.S. Debt Showdown: Q&A with Liliana Rojas-Suarez

The spectacle of U.S. politicians pushing the country to the brink of default is likely to have lingering effects on global financial markets and hence on development, the eleventh-hour compromise notwithstanding. In the near-term, however, the main issue is the U.S. economic slump and the increased likelihood that the world’s biggest economy will fall back into recession.

Cash for Poor Countries, or Another Round of Subprime Lending?

This is a joint post with Benjamin Leo.

A special new lending facility was announced in July 2009 with the objective of providing up to $17 billion in new loans through 2014 and, to entice cash-strapped borrowers, the lender is waiving interest payments for the first two years. This may sound like dangerous new short-term teaser offers for sub-prime borrowers. But this isn’t coming from Countrywide Financial. It actually is a new IMF facility for low-income countries, including some of heavily indebted poor countries (HIPCs) who are just barely coming out of the last debt crisis.

The stated objectives of the new IMF facility are laudable: to offset the effects of the global economic crisis by boosting international reserves and supporting adjustment policies. And yes, the overall terms are more concessional than past IMF loans. Nonetheless, the net impact on national debt levels may be significant. And it was just four years ago that the IMF committed to cancel roughly $6 billion in bad loans to many of these very same countries.