Latest news with #MahmoudMohieldin
Voice of Belady
03-08-2025
- Business
- Voice of Belady
Eleven remedies for debt crisis
Solutions to the debt crisis of the world's developing countries need to be practical and implementable if they are to have the desired effects, writes Mahmoud Mohieldin Last month, the Vatican hosted a conference to launch the Jubilee Report on tackling the debt and development crises commissioned by the late Pope Francis and based on work led by Nobel Prize-winning economist Joseph Stiglitz. During the event, an important question was raised: are the debts accumulated by developing countries intended for production or consumption? The point of the question was that loans to finance investment are more likely to be repaid from the returns, whereas loans for consumption or non-productive sectors are effectively money down the drain, because they yield no returns. In fact, for many developing countries, the situation has reached a point where they are taking out new loans merely to cover the burdens of old ones. These new loans neither contribute to financing investment for production nor to cover consumption expenses. This is a salient feature of the silent global debt crisis, which has trapped borrowers in a cycle of indebtedness. The amounts many countries now have to earmark for debt-servicing payments exceed their budgetary allocations for education and healthcare combined. To make matters worse, the interest payments alone have nearly doubled over the past ten years. It is as though these countries have chosen not to default on their debt repayments at the expense of defaulting on their development goals. Multiple actors have had a hand in producing this crisis. The developing economies adopted strategies of borrowing at a time of low interest rates but did not take the necessary precautions against interest rate hikes, currency fluctuations, or short maturity periods. Instead of relying so heavily on borrowing, with its attendant obligations and risks, these countries should have balanced their budgets, marshalled domestic resources, and readjusted their growth models with an eye to greater reliance on private investment in areas where it performs well and generates profits and, hence, taxable revenues. In particular, they should have encouraged private investment in infrastructure and energy projects, which account for the bulk of their financing needs. As Columbia University professor and former Argentinian economy minister Martín Guzmán has been reminding us that creditors also bear responsibility for the current crisis. They are the ones who extended loans while fully aware of the significant risk of default and charged inflated interest rates to compensate for that risk. Later, when these risks materialised, the creditors were reluctant to provide the relief needed to restore debt sustainability. Nor are the international financial institutions blameless. They contributed to the slow pace of debt-restructuring negotiations between creditors and debtors. They also tolerated the diversion of long-term concessional financing to repay the private sector debts of countries on the brink of default, which meant diverting it away from the development purposes for which it was intended. It is vitally important to formulate effective debt-management procedures based on several factors. First, they should distinguish between cases involving liquidity shortages and those on the verge of actual insolvency. Second, they need to take into consideration the debt structure and nature of the creditors (public or private sector). Third, the dangers of debt are not limited to low-income countries, as middle-income countries are also affected. Of the 54 African countries, 31 are middle-income. These were among the main factors looked at by a task force appointed by UN Secretary General António Guterres to develop practical solutions to the debt crisis. It included former South African minister of finance Trevor Manuel, former prime minister of Italy Paolo Gentiloni, Boston University professor Yan Wang, and the author of this article. We appreciate the fact that, for the proposed solutions to achieve their intended benefits, a solid scientific underpinning was a necessary but not a sufficient condition. They also had to be practically implementable, especially given the current international geopolitical disruptions. The group arrived at the following proposals, which are divided across three levels. On the level of the global financial system, the task force recommended increasing financial support for World Bank and International Monetary Fund (IMF) specialised mechanisms and funds that provide liquidity and debt relief for both middle- and low-income countries; reforming the G20 Common Framework for Debt Treatment to include middle-income countries, suspend debt repayments during restructuring, shorten negotiation periods, and stimulate private sector participation through the IMF's lending mechanisms in cases of arrears; introducing a balanced approach to suspending debt-servicing obligations during crises and shocks that undermine a debtor's repayment capacities; reviewing the debt sustainability analyses conducted by the World Bank and IMF for both low- and middle-income countries; and redirecting unused Special Drawing Rights (SDRs) to inject liquidity, repurchase debt, and strengthen the financing capacities of international development institutions. On the level of international cooperation, especially among countries of the Global South, the task force recommended establishing a centre for information sharing, technical assistance, financial innovation, and advice on debt swap mechanisms; creating a borrowers' forum for the purposes of consultation, coordination in international platforms and organisations, and strengthening institutional capacities; and enhancing the capacity of debt management units. On the level of country-level proposals, it recommended strengthening institutions and policies to manage liquidity, exchange rates, and interest rate risks that would include tighter safeguards to promote borrowing in local currency; improving the quality of projects seeking to attract investment and introduce specialised platforms for mobilising domestic and international resources; and reducing the costs of financing and transactions related to debt swaps and financial innovation instruments, which should be systematically linked to public policies and development plans, thereby relinquishing an ad hoc deal-making approach. To achieve these proposals' intended purpose – relieving existing debt burdens and preventing future crises – they must be implemented effectively within the framework of the financial commitments that are currently being discussed in Seville at the Fourth International Conference on Financing for Development.
Voice of Belady
06-07-2025
- Politics
- Voice of Belady
The passing of the global order
Mahmoud Mohieldin How should the countries of the Global South react to the ongoing changes in the international order? Those most aware of the end of the so-called global order are its own architects. They are like the owner of a football club who invites other teams to play on a field of his own design. He also hires a referee who is told to implement rules that he has designed as well. The teams play match after match, which always end with the victory of the owner's team, because its members know the pitch better and the rules work in their favour. However, then the other teams grow more familiar with the terrain, master the rules, and begin to win some matches. Initially, the owner doesn't mind, as long as he retains the upper hand. But when the competition gets tough and he can no longer ensure victory, he grabs the ball and leaves. These new outcomes were never my intention, he shouts, as he fires the referee, obliterates the lines on the field, tears up the rules, and makes up new ones that ensure his team comes out on top again. Of course, the real world is much more complex than this example might have us believe. One main difference is that the other teams in the game of nations are not about to wait for the master of the old order to bestow on them a new one that has been rigged in his favour. Instead, they will pursue alternative and more equitable arrangements to facilitate trade and investment and to settle any disputes that arise. At the same time, they will try to contain the anger of the owner of the formerly dominant team. They have too much to lose from his attempts to perpetuate his hegemony by creating friction and lashing out against all and sundry with combinations of soft and hard power, while imagining he is clever enough to avoid getting burned by his own ruses. While we are on the subject of the use of power in international relations, let's turn to an article by the late Harvard professor Joseph Nye published just days before his death in the April edition of the journal African Economy. Writing on 'The Future of World Order,' Nye noted how the end of the Cold War in 1991 had given rise to a unipolar world order that allowed for the strengthening of existing international institutions and agreements and the creation of new ones affirming a rules-based approach to the management of international relations. In the role of referees in the global game were the Bretton Woods institutions the International Monetary Fund (IMF) and the World Bank, the World Trade Organisation (WTO), and the UN Framework Convention on Climate Change, among others. However, Nye writes, 'even before Trump, some analysts believed that this American order was coming to an end. The twenty-first century had brought another shift in the distribution of power, usually described as the rise (or more accurately, the recovery) of Asia.' Asia's gains have come more at the expense of Europe than the US, which still represents a quarter of global GDP, as it has since the 1970s, Nye writes. While the Chinese economy has grown considerably, it has not yet surpassed its US rival, and while the Chinese defence industry has progressed by leaps and bounds, China still lags behind the US in overall military weight, alliances, and technology. However, the crucial point with which Nye concludes his article, which draws on both his academic expertise and his experience as a former US assistant secretary of defence, is that 'if the international order is eroding, America's domestic politics are as much of a cause as China's rise.' He leaves readers with the open question as to 'whether we are entering a whole new period of American decline' triggered by the current Trump administration's attacks on the country's institutions and alliances, or whether the current situation 'will prove to be another cyclical dip' from which the US will recover after it hits rock bottom. He suggests that we may not know the answer to this before a new president takes office in 2029. Fate did not grant Nye the chance to see what a post-Trump presidency might look like. However, I doubt the rest of the world will hold its breath until US voters cast their ballots depending on whatever the American mood is at the time. In the interim, we can expect more tit-for-tat in the ongoing global tariff skirmishes. The latest round of these was kicked off on 2 April by the blanket unilateral tariff hikes US President Donald Trump declared on what he called 'Liberation Day.' It ended on 9 April – 'Freeze Day' – when he suspended those tariffs for 90 days because the international financial markets had been severely rocked by the escalating trade war. Since then, various parties have been trying to work out better trade agreements with the US or at least terms that are not as bad as they could have been. The UK managed to strike such a deal, and the European Union is working on one. As for the countries of the Global South, such as the Arab and African nations, perhaps they will heed the advice to increase the added value of their sources of natural and mineral wealth by processing them domestically instead of persisting with the low-yield trade relations based on exporting raw materials and primary goods. They could achieve the desired shift by encouraging companies to invest in domestic manufacturing activities. Working in favour of this is the US' rush to secure critical raw materials for its advanced technological industries, particularly given how China has already made inroads into sourcing such materials, especially in Africa. On precisely this point, economists Vera Songwe and Witney Schneidman believe that the US, in its new trade agreements with Africa, should prioritise opportunities to increase manufacturing partnerships in order to compete with China, which has had a head start in the continent. More important than the foregoing is how the countries of the Global South, having recognised the collapse of the old order, manage the process of development and progress by focusing on people, economic diversification, digital transformation, investment facilitation, and data revolution.
Scoop
28-06-2025
- Business
- Scoop
Secretary-General Launches Report To Break 'The Cycle Of Debt Distress', Ahead Of Major UN Financing Conference
New York, June 27, 2025 - The United Nations Secretary-General today presented new recommendations– Confronting the Debt Crisis: 11Actions to Unlock Sustainable Financing –that aim to break the cycle of debt distress and lay the foundation for unlocking long-term, affordable financing that supports sustainable development. With two-thirds of low-income countries now at high risk of—or already in—debt distress, the report highlights a growing crisis: soaring debt service costs are crowding out vital investments in education, health, and climate resilience. 'The current global debt system is unsustainable, unfair and unaffordable, with many governments spending more on debt payments than on essentials like health and education combined,' said the Secretary-General. 'These 11 immediately actionable proposals can help resolve the debt crisis, empower borrower countries, and create a fairer system.' Prepared by the UN Secretary-General's Expert Group on Debt, the report reinforces the commitments put forward in the FfD4 Outcome Document and makes the case that an end to the debt crisis is entirely feasible—if opportunities are seized. Implementing Policy Priorities Acknowledging the dedication of the Expert Group, the Secretary-General emphasized that the actions, rooted in the Outcome Document, have the potential to drive both short-term impact in relieving pressures on indebted countries, and long-term impact expanding access to long-term, affordable financing that drives sustainable development. The actions are structured around three areas: reforming the multilateral financial system; strengthening cooperation among and providing technical assistance and capacity-building support to borrowing countries; and encouraging borrowing countries themselves to adopt policies and reforms that result in enhanced debt management and improved financing strategies. They include efforts to normalize debt service pauses during crises, including climate-related disasters or other external shocks. This gives space for urgently needed resources to go toward crisis responses. Another area the UN is ready to support is the implementation of a Sevilla forum on debt. About the Secretary-General's Expert Group on Debt Established in December 2024, the Secretary-General's Expert Group on Debt brings together global leaders and technical experts to identify actionable, politically viable solutions to the current debt and development crisis. Led by the UN Conference on Trade and Development (UNCTAD) as Secretariat, with support from the UN Department of Economic and Social Affairs, UN Development Programme and UN Regional Economic Commissions, the Secretary-General called for urgency in implementation. The Group is chaired by Mr. Mahmoud Mohieldin, UN Special Envoy on Financing for the 2030 Agenda, with co-chairs Mr. Paolo Gentiloni, former EU Commissioner for Economy; Mr. Trevor Manuel, former South African Finance Minister; and Ms. Yan Wang, Senior Researcher at Boston University's Global Development Policy Center. About FFD4 The Fourth International Conference on Financing for Development, to take place in Sevilla, Spain, from 30 June to 3 July 2025, presents an opportunity to address these adverse debt dynamics and assist in getting development back on track. The Conference is expected to adopt the Compromiso de Sevilla, an intergovernmentally negotiated outcome, which was approved for adoption by consensus at the Fourth Preparatory Committee Meeting for FFD4 (17 June 2025). The Conference will mark the beginning of implementation of the Outcome Document, signaling a new phase of collective action on financing for development. Coalitions of countries and diverse stakeholders will announce ambitious commitments and solutions under the Sevilla Platform for Action that will operationalize the renewed financing framework and move from dialogue to delivery. The snapshot policy recommendations: A. Multilateral reforms Repurpose and replenish existing funds to enhance liquidity support by extending maturities, financing loan buy-backs and reducing debt servicing amid crises Normalize debt service pauses during crises, including climate-related disasters or other external shocks Reform the G20 Common Framework Reform the debt sustainability analysis to better reflect the position of developing countries Re-channel Special Drawing Rights (SDRs) through the IMF's RST and MDBs where legally possible for scaled-up liquidity and development support B. Co-operation between countries Establish a shared information hub to provide technical assistance and guidance on innovative financial instruments, including debt-for-development swaps Establish a forum for borrowers to share knowledge and experiences, provide advice and enhance the effectiveness of their representation and voice in international forums Expand technical assistance and capacity development to debt management offices and treasuries C. National measures Strengthen institutional capacities to address liquidity risks, currency mismatches and interest rate exposure and improve debt management Improve the quality of investment project pipeline and establishment of national country platforms Reduce the transaction costs and raise the impact of debt swaps and other innovative financial instruments through scale, standardization and frequency and alignment with national development strategies
Zawya
26-05-2025
- Business
- Zawya
Al Baraka Group announced as global partner of the 2nd Global Islamic Economy Summit in Istanbul
Manama: Al Baraka Group (ABG) has announced its sponsorship as a Global Partner of the 2nd Global Islamic Economy Summit in Istanbul. This high-level summit, held under the theme: 'Islamic Economics Strategies: Path to an Influential Global Economy,' will take place at Istanbul Financial Center (IFC), from Friday May 30th to Sunday, June 1st 2025. With a legacy spanning over fifty years of leadership, Al Baraka Group continues through this strategic partnership to play a pivotal role in shaping the future of Islamic economics across continents. The Group is not merely a leading financial institution, but also a visionary force driving profound transformations to ward ethical economies, inclusive development, and global strategic dialogue. We are also proud and honored to announce that this prestigious summit is held under the presence of the President of the Republic of Türkiye, H.E. Recep Tayyip Erdoğan, who will officially opening the summit. The summit's agenda, attended by global influencers, top economists, and leading thought leaders, includes keynote speeches from H.E. Shaikh Abdullah Saleh Kamel, Chairman of the Board of Trustees of AlBaraka Forum, and H.E. Dr. Mahmoud Mohieldin, United Nations Special Envoy. The summit will also witness the official launch of the AlBaraka Islamic ESG Index, powered by Spectreco, and a special session held under the auspices of the Saleh Kamel Islamic Economics Award, featuring leading researchers from top Turkish universities. The summit's proceedings will be divided into six thematic panel sessions addressing strategic issues, including: The strategic roadmap for central banks in promoting Islamic economics, finance, and banking at the national and international levels; Strategic planning for the sustainable development of the Islamic economy (short- and long-term) ; Strategic Islamic economic planning; Economic strategies for sustainable growth in the Islamic economy; Strategies for social and environmental well-being, social justice, and economic empowerment; and Strategies for Islamic entrepreneurship and startups to achieve sustainable success. On this occasion, Mr. Houssem Ben Haj Amor, Board member and Group CEO of Al Baraka Group, stated: 'We are delighted to sponsor the second Al Baraka Summit in Istanbul, reaffirming our continued commitment to the values laid down by our late founder, Shaikh Saleh Kamel.' He added: 'Through our sponsorship of this summit, we reaffirm Al Baraka Group's role as a leading reference in Islamic banking and finance dedicated to establishing and advancing the Sharia-compliant foundations of economic transactions and the broader Islamic economy.' About Al Baraka Group: Al Baraka Group B.S.C. (C) is licensed as an Investment Business Firm – Category 1 (Islamic Principles) by the Central Bank of Bahrain. It is a leading international Islamic financial group providing financial services through its banking subsidiaries in 13 countries offering retail, corporate, treasury and investment banking services, strictly in accordance with the principles of Islamic Shari'a. The Group has a wide geographical presence with operations in Jordan, Egypt, Tunisia, Bahrain, Sudan, Turkey, South Africa, Algeria, Pakistan, Lebanon and Syria, in addition to two branches in Iraq and a representative office in Libya and provides its services in more than 600 branches. ABG's network serves a population totaling around one billion customers. The authorized capital of ABG is US$ 2.5 billion.
Al Etihad
15-05-2025
- Business
- Al Etihad
UAE leading model in economic diversification, AI adoption: UN Envoy
15 May 2025 15:42 ABU DHABI (WAM) United Nations Special Envoy on Financing the 2030 Agenda for Sustainable Development, Dr. Mahmoud Mohieldin, has praised the UAE as a pioneering model in the region for economic diversification, future-focused investment, and the strategic use of advanced technologies to drive sustainable to WAM, Dr. Mohieldin highlighted the UAE's robust economic growth, powered by the rising contribution of non-oil sectors and increased investments in technology and renewable energy, despite global economic challenges and volatility in emerging indicated that the UAE's economic policy has placed a strong emphasis on enhancing private sector participation and expanding investments in solar and wind energy, green hydrogen, and the peaceful use of nuclear UN officials also underscored the UAE's rapid shift toward digital transformation and artificial intelligence, not only as tools to improve operational efficiency but as key pillars for boosting economic competitiveness and creating new avenues for commended the country's efforts in building digital infrastructure and supporting innovation-driven enterprises and a regional level, he said that economic growth forecasts for the Middle East have been slightly revised downward, citing global trade tensions and a slowdown in international investment flows. According to international financial institutions, regional growth is expected to range between 2.5% and 2.7% this year, about one percent lower than the average for emerging markets and developing economies.
