The Territory's foreign debt stood at 50 million, while the domestic debt was estimated at 40 million.5

Although no external relief for domestic debt is envisaged, success in achieving the Millennium Development Goals will be greatly assisted by ensuring macroeconomic stability, of which prudent domestic public debt management is an important element.

That is why, for domestic debt disputes, countries have bankruptcy laws and courts. But there is no such mechanism to adjudicate international debt disputes.

Options include international debt financing, domestic tax revenue and user fees, borrowing in domestic capital markets, and public private partnerships for water related investments.

An integrated asset liability structure is needed that also encompasses domestic debt and off balance sheet items.

Nonetheless, Argentina s latest debt trauma shows that the global system for sovereign debt workouts remains badly in need of repair. Deepening domestic debt markets and perhaps change along the lines proposed by the IMF is sorely needed.

In November 2001, the authorities again restructured the public debt, this time exchanging dollar denominated bonds for domestic guaranteed loans.

This distinction between foreign and domestic debt is particularly important in the context of the euro crisis, because eurozone countries cannot devalue to increase exports if this is required to service foreign debt. And the evidence confirms that the euro crisis is not really about sovereign debt, but about foreign debt.

Reduction of debt service burdens can release domestic resources that can be allocated to slum upgrading or other urban developing activities.

Accumulating excessive debt usually entails moving some part of domestic aggregate demand forward in time, so the exit from that debt must include more savings and diminished demand. The negative shock adversely impacts the non tradable sector, which is large (roughly two thirds of an advanced economy) and wholly dependent on domestic demand.

A reduction of domestic public debt could also help to boost growth by freeing resources for the productive sectors of the economy.

Poverty increased, the currency suffered repeated devaluations, foreign and domestic debt registered an increase and the growth rate of the economy fell.

It can also provide technical expertise to Arab policymakers on debt management. Without first rate expertise in debt management, an economy implementing large scale public outlays risks crowding out private investment through overreliance on domestic savings.

Using our own enhanced domestic revenues, increased ODA and debt relief, we were able to invest heavily in education, improving access and quality.

However, total domestic debt increased substantially in 2004, reaching 433.8 billion Egyptian pounds (LE) in September 2004, or 87.1 per cent of GDP.

But the cost that the debt crisis imposed on the domestic economy was very high, and not only through a prolonged period of recession.

By and large, experience supports this method. Indeed, the huge expansion in emerging market domestic debt issuance in recent years has helped reduce market tensions (though continuing reliance by corporates on foreign debt still leaves many countries vulnerable).

The Government of Jordan continued its efforts to restructure the public debt stock, gradually replacing external by domestic sources with the external debt to GDP ratio declining from 76.4 per cent to 69.7 per cent during 2003 2004.

In spite of this, the Government remains unable to pay the backlog of civil service arrears from 2003, domestic debt or salaries for January 2005.

This debt reduction, coupled with Canada's strong economic growth, has resulted in a significant decline in the federal debt to GDP (Gross Domestic Product) ratio, from its peak of 68.4 percent in 1995 1996 to an expected 38.8 percent in 2004 2005.

Improve individual countries domestic policy mix in a manner that targets debt sustainability through both growth promotion and deficit reduction, especially in the most vulnerable peripheral economies

Bulgaria has been able to reduce its foreign debt from over 100 per cent of gross domestic product to about 38 per cent in March this year.

The main pillar of our programme is the fiscal adjustment needed to limit external vulnerability and the increase of Croatia's external debt to gross domestic product ratio.

Over and above these problems, we face mounting domestic and external debt, an unfair and inequitable global trading system and the prevalence of conflicts and political instability.

(a) Preparation of case studies on existing capacities for domestic resource mobilization and investment and on mechanisms for enhancing resource flows, in particular from non debt creating sources

According to Central Bank estimates, total external debt at the end of June 2002 was over 6.4 billion, and domestic debt amounted to 1.7 billion. When these figures are compared to GDP, the limitations on the provision of public goods and services become clear.

While developing countries agree that domestic resources need to be mobilized as much as possible, it is also important that developed countries promote international trade in the interest of development, increase official development assistance (ODA) and work towards sustainable debt financing and external debt relief.

That might be true, but stronger domestic demand would lead to higher imports, which would need to be paid for with higher export revenues, because the country cannot afford to accumulate more foreign debt. No exports, no growth Greece s debt sustainability ultimately depends on this key parameter.

(e) Preparation and dissemination of guidelines for the enhanced mobilization of domestic resources and resources from external non debt creating sources, incorporating the lessons learned from the country case studies.

The notable exceptions to this trend are countries that manage cross border capital flows, especially the corporate sector s exposure to foreign currency debt. Indeed, certain types of capital flow management including limiting domestic debt denominated in foreign currency for both firms and households have been shown to increase resilience.

So far, the country has not experienced a debt crisis, and interest rates remain exceptionally low, at around 1 . The reason is obvious Japan has run sizeable current account surpluses for decades, giving it more than sufficient domestic savings to absorb all of its public debt at home.

Ethiopia had significantly improved its capacity to mobilize domestic financial resources, and welcomed the recent debt cancellation for heavily indebted poor countries and the setting of timetables to reach ODA targets.

But governments offer no collateral, and their principal incentive to repay the fear of being cut off by international credit markets derives from a perverse addiction. Only governments that are chronically unable to finance their outlays with domestic taxes or domestic debt must keep borrowing large sums abroad.

Debt sustainability and debt relief

Take effective measures to prevent and redress the serious problems commonly faced by non citizen workers, in particular by non citizen domestic workers, including debt bondage, passport retention, illegal confinement, rape and physical assault

Most economists failed to foresee the economic dynamics that actually led to the crisis, because they failed to pay enough attention to the rapid increase in US total debt. Instead, they focused exclusively on US foreign debt, ignoring household debt (mortgage and consumer debt), public debt, business debt, and financial debt.

3. Stresses that sustainable debt financing is an important element for mobilizing resources for public and private investment, and that national comprehensive strategies to monitor and manage the external liabilities embedded in the domestic preconditions for debt sustainability, including sound macroeconomic policies and public resource management, are a key element in reducing national vulnerabilities

4. Stresses that sustainable debt financing is an important element for mobilizing resources for public and private investment, and that national comprehensive strategies to monitor and manage the external liabilities embedded in the domestic preconditions for debt sustainability, including sound macroeconomic policies and public resource management, are a key element in reducing national vulnerabilities

nbsp nbsp nbsp nbsp nbsp nbsp nbsp nbsp Improve individual countries domestic policy mix in a manner that targets debt sustainability through both growth promotion and deficit reduction, especially in the most vulnerable peripheral economies

In recent years, domestic public debt has increased significantly in a large number of countries in most regions, reflecting increased fiscal deficits and rising contingent liabilities, despite the large privatization programmes undertaken since the 1990s.

After the subprime crisis erupted, mortgage and consumer debt was paid down by households either with their savings or by default. The fall in US total debt, and the narrowing of the financing gap between total debt and domestic funds, led to a significant improvement in the US current account deficit in 2008 2009, disproving US Federal Reserve Board Chairman Ben Bernanke s claim that the deficit was caused by a global saving glut.

The aim of Italian Eurosceptic government was that the budget deficit was equivalent to 2.4 of gross domestic product (GDP) in the next three years, suggesting that there was no debt reduction despite deficit reduction requirements.

With no growth in Germany, the rest of the eurozone might not be able to reduce debt via external surpluses. And there might be no solution short of a magic button to increase German domestic demand.

Third, while pesification removes balance sheet losses from domestic foreign currency debts, external contractual obligations cannot be redenominated unilaterally. Thus, the exit from the dollar peg requires a restructuring of external debt, both sovereign and corporate.

In a globalized world, partnerships were clearly crucial, and additional resources had to be secured through external debt relief, an improved global trading system, increased ODA and both foreign direct investment and mobilization of domestic resources.