F. Debt burden adjustment . 40 41 20

F. Debt burden adjustment

The realignment of the Heavily Indebted Poor Countries (HIPC) Debt Initiative after 1999 has considerably reduced the indebtedness of some 27 States.

Debt and low per capita income adjustment

D. Debt burden adjustment

Miscellaneous savings in liquidating obligations and adjustments

INDRA will provide that service only if creditors extend maturities of firms short term debt into loans with maturities of between one and four years.

Firms will make rupiah payments to INDRA equivalent to the dollar amount of their short term debt valued at a predetermined exchange rate, and INDRA will make the payment to the creditor bank in dollars.

Debt, low per capita income adjustment with positive gradient and LDC adjustment

His delegation therefore supported the application of the debt burden adjustment based on the debt stock approach.

Some members considered that the threshold should also be based on debt adjusted income figures.

The debt burden adjustment had formed part of the methodology for preparing both the current and previous scales.

26. The international community has also provided assistance to debtor countries in the restructuring of their debt to commercial banks.

For starters, when it comes to public debt, there is a big difference between the gross and net figures. While Japan s gross public debt, for example, is a massive 246 of GDP, the net figure, accounting for intra government debts, is 127 of GDP.

Net total debt increased to 11.4 billion.

This threshold was compared with the debt adjusted per capita GNI of each Member State.

The plan takes effect from 1 August 1998, and is centred around a new institution, the Indonesian Debt Restructuring Agency (INDRA).

(iv) Debt adjustment to be based on actual principal payments

(d) A debt burden adjustment in 1998 based on actual principal repayments and in 1999 and 2000 on the debt adjustment approach employed in the scale of assessments for the period 1995 1997

Annex X to the report of the Commission provides the proposed restructured net base salary scale for the Professional and higher categories annex XII explains the application of the scaling forward method of adjusting net remuneration levels.

2. Net transfer of financial resources of net debtor developing countries, 1987 1997

A deal was finally reached in June 1998 on the restructuring of interbank debt, corporate debt and trade credits.

The debt burden adjustment should therefore be retained in the methodology.

For the same reason, the existing debt burden adjustment formula should be kept.

77. Some formal framework is needed to prevent moral hazard behaviour by debtors and to allow payments suspensions which are part of a process of cooperative and non confrontational debt renegotiation between debtors and creditors.23 There are no formal means for explicitly approving decisions by sovereign debtors to suspend payments.

The current debt burden adjustment should be retained, as should the current formula for the low per capita income adjustment.

35. The debt burden adjustment should continue to be based on both principal and interest payments.

73. The proposal to establish an international bankruptcy court for sovereign debtors that would be empowered to declare a standstill, negotiate a debt restructuring, promote adjustment by the debtor country, organize settlement terms and inject interim finance has been generally dismissed on several grounds.21, 22 First, private creditors would be reluctant to forego their recourse to national courts.

Changes in the policies applied by the multilateral financial institutions were also necessary in order to ensure a net transfer of resources to developing countries through reductions in interest rates and extensions of debt maturity dates.

49. Mr. Tcholakov (Bulgaria) said that the element of debt burden adjustment should be retained in any future scale of assessments as an additional incentive for debt repayment discipline.

Accordingly, as set forth in table 9 below, it is recommended that the awards for these claims be corrected.

(iv) The debt adjustment approach proposed by the Committee on Contributions in paragraph 41 of its report 3

(iii) The debt adjustment approach used in the preparation of the scale of assessments for the period 1995 1997

Net excess (shortfall) of income over expenditure

The Government followed up on the debt restructuring by directing the banks to arrange corporate restructuring of distressed indebted firms.

(39) As regards the non adjusting events after the balance sheet date, it is required to, according to the provisions of the Accounting Standards for Enterprises No.29 Events after the Balance Sheet Date, state the contents of such events and estimate their impacts on the financial status and business performance of the Company, and, in case it is unable to make the estimation, it shall specify reasons therefor.

(iv) No adjustment for external debt

51. The Committee is aware that, in approving the scale of assessments for the period 1998 2000, the General Assembly decided to use a debt burden adjustment based on debt flow in 1998 and one based on a proportion of total debt stocks in 1999 and 2000.

If the credit risks of the debtor and the corresponding risk agios have undergone any change after the issuance of the liability instrument, the current prices or interest rates of similar liability instruments shall be referred to and the adjustment to the differences between different financial instruments shall be taken into consideration in the determination of the fair value of the liability instrument.

(d) The debt burden approach employed in the scale of assessments for the period 1995 1997

(d) The debt burden approach employed in the scale of assessments for the period 2004 2006

The most recent debt restructuring of Argentina illustrated well the conditions described above.

Due consideration must also be given to the element of debt burden adjustment, particularly since most of the least developed countries were overwhelmed by their debt burden.

Debt cancellation did not necessarily lead to net flows.

That arrangement would involve private creditors in negotiating terms of a restructuring the provision of financial support by IMF can improve the bargaining position of the debtor, and combined with the adjustment programme, can signal to the unpaid creditors that their interest is best served by quickly reaching an agreement with the debtor.