Although the government s stimulus policies have increased the national debt, the debt GDP ratio remains relatively low, at roughly 37 . Public debt in Japan, by contrast, exceeds 220 of GDP.

For fiscal policy, the crisis showed the value of maintaining low public debt and deficits during good times countries with healthier public finances have more space to cushion the economic impact of crises. But the Great Recession has caused public debt and deficits in many advanced economies to soar.

It had been estimated that every percentage point increase in debt service in low income countries reduced public investment by about 0.2 per cent.

External public debt

Many African countries have used the past decade to put in place sound and sustainable economic policies that have delivered robust growth and low inflation. Together with debt relief, these policies have resulted in low levels of public debt, relatively sound financial systems, and most important  rising living standards.

Many African countries have used the past decade to put in place sound and sustainable economic policies that have delivered robust growth and low inflation. Together with debt relief, these policies have resulted in low levels of public debt, relatively sound financial systems, and most important rising living standards.

Italy has tried to counteract the economic contraction by increasing its public debt. With the European Central Bank and intergovernmental rescue operations keeping interest rates low, Italy s public debt has been able to rise by one third from the end of 2007 to the spring of 2014.

First, while there may be scope for fiscal stimulus in some countries, in many countries it is limited hence, the region as a whole must protect its hard won low level of public debt. When the storm has passed, low levels of public debt and sustainable public finances will be crucial to preserving spending that helps the poor and to bringing back the international investors who are indispensable for Africa s future growth

Servicing of external public debt

a Excludes official public debt.

Although Greece s public debt amounts to about 175 of GDP, low interest rates which are fixed for a large proportion of it and long maturities mean that it may be more manageable than it seems. Greece s ratio of public debt service to GDP is similar to that of Portugal, or even Italy.

Therefore, cancellation of half the debt of low income countries would translate into a 0.5 per cent increase in annual growth and fiscal space for increased public and private investment.

C. Public debt in the ESCWA region

Public debt in the more diversified economies

But that debt costs only 1 2 of GDP to service, allowing Japan to remain solvent. Likewise, Greece can now manage its public debt burden, which stands at about 175 of GDP, thanks to the ultra low interest rates and long maturities (longer than those on Japan s debt) granted by its European partners.

Public debt in the Gulf Cooperation Council countries

To be sure, China overcame a similar challenge in its public sector from 1998 to 2001. It pursued growth boosting investment in infrastructure and real estate development to eliminate deflation, while maintaining artificially low interest rates to contain the rise of public debt.

The question of debt sustainability analysis is also key to the resolution of the debt crisis of other low and middle income countries.

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.

History offers two clear lessons reducing public debt is incredibly difficult without growth, and increasing growth is incredibly difficult with a huge burden of public debt. So we face a twofold imperative securing growth while reducing debt.

b Total public debt denominated in pesos and foreign currency.

In general, the Gulf Cooperation Council countries maintain low or modest external debt stocks and debt to GDP ratios and have accumulated substantial foreign assets.

The US can do a lot, in part because of the dollar s status as the main international reserve currency. Low interest rates mean that the additional debt burdens that public borrowing will create can remain manageable.

What the market is saying is not that the economy has too much debt, but that it has too much private debt, which is why prices of corporate bonds are low and firms find financing expensive. The market is also saying clearly and repeatedly that the economy has too little public US government debt, which is why everyone wants to hold it.

For starters, Syriza and others argue that Greece's public debt, at a massive 170 of GDP, is unsustainable and must be cut. Given that the country's official debt constitutes the bulk of its overall public debt, the government wants it reduced.

In most advanced economies, aging populations a serious problem in Europe and Japan exacerbate the problem of fiscal sustainability, as falling population levels increase the burden of unfunded public sector liabilities, particularly social security and health care systems. Low or negative population growth also implies lower potential economic growth and therefore worse debt to GDP dynamics and increasingly grave doubts about the sustainability of public sector debt.

In Lebanon, persisting high levels of public debt forced the Government to direct much of its expenditure towards debt service.

The monetary easing undertaken by the US Federal Reserve raised expectations for a devaluation of the US dollar that might help US exports. But domestic savings remain low in the face of persistently high levels of public debt.

Progress also needed to be made on extending external debt cancellation to low and middle income countries.

In Pakistan both the public and private spending on health is low.

A public debt crisis in Japan (as the combination of recession, deflation, and high deficits drove up the debt GDP ratio).

He argued at that time, and rightly in my view, that short term tax reductions and transfers would be partly saved, not spent, and that public debt would multiply and create a long term shadow over the fiscal balance and the economy. Even if interest rates are currently low, he noted, they will rise, thereby increasing the debt service burden on the newly accumulated debt.

This year, the Group of Eight countries have pledged increased aid and debt cancellation for low income countries.

In short, with low enough interest rates, any debt to GDP ratio is manageable. That is why, in the current interest rate environment, the Maastricht Treaty s requirement limiting public debt to 60 of GDP is meaningless and why the so called fiscal compact requiring countries to make continued progress toward that level should be reconsidered.

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.

The survey showed a very low level of public awareness of these signs.

Even Bachelet s critics agree that Chile s basic macroeconomic policies will not change an independent central bank committed to price stability, a free trade regime with a floating currency, and a fiscal policy that will keep deficits and public debt low.

The problem lies in a mismatch between their respective shares of tax revenues and mandatory expenditures. With local governments forced to cover a large proportion of public spending with a disproportionately low share of revenues, local government debt has swelled.

Those that do relatively well share three characteristics low levels of public debt, limited dependence on exports or capital flows, and robust democratic institutions. So Brazil and India are relative havens, even though their growth prospects are severely diminished as well.

Action on debt relief and trade reform to benefit low income countries should also reflect the Millennium Development Goals.

Syriza also plans to demand a substantial reduction in Greece s foreign debt, the nominal value of which remains very high close to 170 of GDP. In fact, the real present value of the debt is much lower, given that most of it is now held by governments or other public entities and carries long maturities and low interest rates.

Only mutualization of debt issuance can generate the low (risk free) interest rate needed to enable these countries to put their public finances on a sound footing and lay the basis for a return to economic growth. All eurozone countries should, therefore, finance debt by issuing bonds that would be jointly guaranteed by all member states.

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The low level of women's participation in political and public life was particularly disappointing.

High public debt levels would still have to be reduced to create fiscal space and keep interest rates low enough to restore long term confidence. That means that courageous structural reforms must still be pursued in the peripheral countries indeed, throughout Europe.