Since 2005, two debt sustainability frameworks and country-level debt sustainability analyses designed by the International Monetary Fund and World Bank have provided standardized tools to measure and assess debt sustainability. While they have a number of advantages, the utility of these tools for small states is limited by several factors, including insufficient treatment of exogenous shocks, limitations in the tools used to assess debt sustainability and a narrow definition of debt sustainability. This has reduced their reliability in assessing debt sustainability and as a mechanism to help inform both countries’ debt management policies and donor, lender and investor decision making. Several practical modifications can strengthen these tools and improve their utility for small states.

  • Cyrus Rustomjee

    Cyrus Rustomjee is a senior fellow with CIGI’s Global Economy Program, where he focuses on the blue economy. Currently a managing director at Cetaworld Ltd., an independent consulting practice, Rustomjee has also served in key positions at the International Monetary Fund (IMF), the Commonwealth of Nations, the G20 and the government of his native South Africa.