Indonesia's Debt-for-Development Swaps: Past, Present, and Future

Cassimon, Danny; Essers, Dennis; Fauzi, Achmad

doi:10.1080/00074918.2014.896238

Cited by 6 publications

(6 citation statements)

References 19 publications

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“…According to the authors, the design and use of the debt swap instrument dates back to the 1990s with the rst instruments taking the form of debt-for-equity swaps. Debt restructuring started almost immediately after World War II and accelerated when the Paris Club was founded in 1956 (Cassimon et al, 2014). Comprised of o cials from major creditor countries, the club would initiate rst large-scale debt relief programs in the form of debt-for-equity swaps, and from 1991 onwards allow debtors to convert their public debt into local payments for social or environmental projects (Cassimon et al, 2011).…”

Section: Features Of Sustainability-linked Bondsmentioning

confidence: 99%

Innovative Financing of the Sustainable Development Goals in the Countries of Western Balkans

Lukšić

Bošković

Vrbensky

2021

Preprint

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Background: This paper is related to the current stage of the development in the Western Balkans. Despite becoming a growing instrument to finance sustainable development green, debt swaps and social or sustainability bonds are a relative novelty in this region. At the same time the development needs are huge, especially in the light of the Covid-19 aftermath. Results: We have analyzed the public debt position in the Western Balkans countries which points to the deteriorated new debt accumulation perspective especially in the light of the growing public debt over the past decade. Our research suggests that the ESG/Sustainability-linked bonds and debt-for-climate swaps as innovative financial instruments seem to be promising to leverage additional finance into sustainability goals in the Western Balkans Six given their need on the EU track and their economic and structural challenges. After briefly discussing the methodological approach, we discuss the history and features of green bonds and debt-for-nature swaps and their diverse underlying mechanisms. Then we derive recommendations for policymakers in designing future green bonds and debt-for-nature swaps and apply these to national circumstances in the Western Balkans Six. Conclusions: The related countries need to explore more innovative approaches to finance sustainable societies. In the close cooperation with the EU and related to the European Green Deal countries of the Western Balkans six should feel motivated to design financing mechanisms that will bring in the more transparency into the different policies and the more accountability for their implementation. The EU should stand ready to use its cohesive and pre-accession funds to support such market mechanisms, which can bring the cooperation to the next level. Applying the recommended modality may help keep the problem of the public debt be kept at bay while additional funds may support implementation of thestructural reforms.

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Section: Features Of Sustainability-linked Bondsmentioning

confidence: 99%

Innovative Financing of the Sustainable Development Goals in the Countries of Western Balkans

Lukšić

Bošković

Vrbensky

2021

Preprint

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“…3) Debt for Nature Swap (Commercial Debt-for-Nature Swaps) Debt-for-Nature Swap is a donor agreement to reduce or cancel government debts of developing countries in return for a government's commitment to protect nature through investment in conservation projects [3]. The implementation of debt for nature swap may be good since it can reduce the country's debt and also can increase the protection of biodiversity.…”

Section: Financial Solutions For Biodiversity Funding In Indonesiamentioning

confidence: 99%

Financial solutions for biodiversity in contributing to the economic development in Indonesia

et al. 2018

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Having strategic position makes Indonesia rich in biodiversity. However, there is a gap in funding this biodiversity; whereas, the existence of this biodiversity can be optimized by the government to enhance the economic development in Indonesia. This study aims to analyze potential financial solutions to fill the gap and increase the biodiversity funding in Indonesia. This research did a literature study from various sources such as BIOFIN countries, UNDP, and IBSAP of Indonesia; and conducted an assessment based on the results, sources, financial impact categories, and likelihood of success categories. The results show that out of 156 financial solutions studied, 32 of them have high financial impacts and are most likely successful to be implemented in Indonesia, and 8 of them are very potential to be implemented; those are state budget, corporate social responsibility (CSR), nature swap debts, taxes and fees in the tourism sector, payment for ecosystem services, ecological fiscal transfers (EFT), zakat, infaq, shadaqah, and waqf (ZISWAF), and green sukuk.

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“…The conversion rate was 50%, and the Indonesian government promised to invest in the construction of 100 new junior secondary schools in the remote Eastern provinces between 2005 and 2007. To rebuild the Indonesian schools damaged by the earthquake in Yogyakarta and Central Java in 2006, a third swap of 20 million Euros was transacted (Cassimon & Essers, 2014;. There was a positive result of the debt swaps such as the (apparent) budgetary gains in the education sector .…”

Section: Case Between Germany and Indonesiamentioning

confidence: 99%

Debt swaps for financing education: Exploration of new funding resources

Ito

Sekiguchi

Yamawake

2018

Cogent Economics & Finance

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As an innovative financial mechanism to explore additional funds for social development programs in developing countries, debt swaps for development, including debt-for-education swaps, became popular between the 1980s and 2000s. Their popularity, however, seems to have diminished since the beginning of the 2010s. This article describes debt swaps for development with a focus on debt-foreducation swaps, explaining how they became popular, examining why they have lost momentum, and exploring whether debt-for-education swaps are a feasible option for funding social development programs. Despite recent economic recovery and growth worldwide, one of the key obstacles for achieving the United Nations' Sustainable Development Goal 4-to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all-remains inefficient funding for education programs in developing countries. Based on the findings, this article argues for the feasibility of debt-for-education swaps to seek funding with a number of conditions.

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Indonesia's Debt-for-Development Swaps: Past, Present, and Future

Cited by 6 publications

References 19 publications

Innovative Financing of the Sustainable Development Goals in the Countries of Western Balkans

Innovative Financing of the Sustainable Development Goals in the Countries of Western Balkans

Financial solutions for biodiversity in contributing to the economic development in Indonesia

Debt swaps for financing education: Exploration of new funding resources

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