60 Years of Official Debt Restructuring through the Paris Club: Evolution, Macro Impact and Relevance for Developing Asia 2017 | Women’s Finance Exchange | 8 May 2017 | Tokyo, Japan

Despite the frequency of official debt restructuring, little systematic evidence has been produced on its characteristics and implications. Using a dataset of 422 Paris Club agreements, the presenter will show that the progressive introduction of new terms of treatment gradually transformed the Paris Club into a functioning platform to provide debt relief, having largely benefited heavily indebted poor countries (HIPCs), but also developing countries, including Asian countries. The presenter will further demonstrate that the conditions and approaches of debt restructuring matter. Nominal relief is associated with higher economic growth but less prudent fiscal discipline after restructuring. In contrast, agreements offering only net present value (NPV) relief have no positive impact on growth but help countries pursue fiscal sustainability. Stimulating growth and fostering fiscal sustainability are thus the policy trade-offs that official creditors need to consider when designing future debt restructuring.

Gong Cheng is a senior economist at the European Stability Mechanism. Gong’s academic research focuses on international macroeconomics and finance, with a particular interest in sovereign debt restructuring, regional financing arrangements, and reserve accumulation. Gong previously worked as an economist in the international macroeconomics division at the French Central Bank. He holds a PhD in Economics from Sciences Po, Paris, and Masters’ degrees in finance and international political economy from Sciences Po and the London School of Economics. Gong was also a visiting researcher in the Department of Economics at UC Berkeley in 2012-2013.