## gsdr-cochairs-progress-report-october-2024 - Executive Summary

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---

### Progress since April 2024 and status of ongoing restructurings
- Ongoing restructuring cases have reached important milestones, both under the Common Framework (CF) and outside.
- The Common Framework is delivering faster and more predictable debt treatments, as evidenced by Ghana and Ethiopia.
- Restructuring processes outside the Common Framework are also improving, as evidenced by Sri Lanka.
- Specific case updates:
  - Ghana:
    - Reached an agreement in principle with its international bondholders in June.
    - Completed the 2nd Review of its Fund-supported program on June 28.
    - Finalized its Eurobond exchange in October.
  - Sri Lanka:
    - Reached a final agreement with the OCC and China EXIM in June.
    - Reached an agreement in principle with its international bondholders in September.
    - Completed the 2nd Review of its Fund-supported program on June 12.
  - Ethiopia:
    - Reached staff-level agreement with the IMF in May.
    - The OCC (co-chaired by China and France) met in July and provided financing assurances.
    - Fund-supported program approved by the IMF Board on July 29.
    - First review approved on October 18.
- Other cases noted as advancing: Zambia, Suriname, and Chad (with Chad’s 1st and 2nd Reviews combined).
- Malawi noted as of a different nature that does not involve creditor coordination challenges central to GSDR work.

### Need to continue building common understanding; debt vulnerabilities and liquidity pressures
- Debt vulnerabilities remain elevated and uncertainties in the global economy are significant.
- It is critical to continue advancing and solidifying common understanding on key technical issues to ensure efficient, timely and predictable restructuring processes and to strengthen the debt restructuring architecture.
- Supporting countries where debt is sustainable but liquidity pressure is high has become a priority:
  - Solvency risks seem broadly contained, but many low-income countries and some emerging markets face significant liquidity pressures.
  - If unaddressed, liquidity challenges could morph into a debt crisis.

### IMF–World Bank three-pillar approach to address liquidity challenges
- The IMF and World Bank proposed a three-pillar approach in a joint Bank-Fund non paper:
  - Pillar 1: Structural reforms to boost growth and jobs and mobilize domestic resources, supported by capacity development.
  - Pillar 2: Adequate financial support, including from international financial institutions.
  - Pillar 3: Actions to reduce debt servicing burdens, including through greater use of risk-sharing instruments by external partners, where relevant, to incentivize higher inflows from private creditors.
- Eligibility and implementation:
  - Countries whose debt is sustainable, but experiencing temporary liquidity pressures, as assessed through debt sustainability analysis, and that are undertaking or committed to structural and fiscal reforms, could make use of this three-pillar approach.
  - The approach constitutes a “menu of options” from which a country-specific package would be activated, tailored to the country’s unique circumstances and needs.
- Broad consensus in GSDR:
  - Urgency to tackle liquidity challenges and importance of combining different support mechanisms.
  - Need for coordinated efforts while keeping a bottom-up, country-specific approach.
  - Agreement to continue discussions to flesh out the consensus on how to address these challenges.

### State-Contingent Debt Instruments (SCDIs)
- Definition and types:
  - SCDIs are debt instruments with cash flows that differ according to future states of the world.
  - Typical SCDIs include value-recovery instruments (VRIs) and climate resilient debt clauses (CRDCs).
  - Examples: GDP warrants in Argentina (2005/10), Greece (2012), Ukraine (2015); upside instrument linked to Citizenship by Investment revenues in Grenada (2015); VRIs in many Brady restructurings; Suriname’s 2023 restructuring included a VRI linked to future oil revenues.
  - Recent considerations: Zambia (SCDI linked to future debt carrying capacity or exports); Sri Lanka (SCDI linked to future GDP or governance improvements). Ghana did not include any SCDI.
- Benefits and limitations:
  - SCDIs can help bridge debtor-creditor gaps in restructurings where uncertainty is high, but they should not be the norm.
  - Costs to the debtor:
    - SCDIs are not “free” and change the balance of risks; may risk “selling off” future revenues, limit ability to rebuild buffers, or trigger higher pay-offs when capacity to repay is low.
  - Investor perspective:
    - Investors have typically shunned and undervalued VRIs due to complexity, lack of liquidity, limited correlation with conventional fixed-income portfolios, and susceptibility to government influence.
    - From the borrower’s perspective, VRIs have been limited by undervaluation, lack of payout caps, indexation lag, political incentives for overly generous terms, moral hazard, and monitoring capacity challenges—especially for LICs.
- Design and safeguards when used:
  - When used, SCDIs should have well-defined verifiable triggers and be consistent with debt sustainability assessments and IMF program parameters in all scenarios.
  - Consider merits of payout caps and mechanisms to ensure payments can be adjusted both up and down.
  - Design elements recommended:
    - (i) Careful selection of verifiable triggers reflecting increased repayment capacity.
    - (ii) Ensure payments associated with SCDIs do not compromise debt sustainability prospects (e.g., payout caps).
    - (iii) Use market-friendly design where feasible, such as one-time tests and shorter-maturity instruments to limit uncertainty, subject to debt sustainability risks being managed.
- Comparability of Treatment (CoT) challenges:
  - Assessing CoT is complicated by SCDIs due to higher uncertainty over cash flows and lack of agreement on ex ante vs ex post CoT assessment.
  - Differences between private and official creditor SCDIs, or the presence in only one creditor group, may require additional iterations and can impact restructuring timelines.
  - Early engagement across creditor groups can facilitate common understanding.
  - GSDR members supported bringing further clarity on the treatment of SCDIs in CoT assessments through a specific workshop.

### Collateralized financing from private creditors
- Benefits and risks depend on specific financing terms:
  - Collateralized financing of projects where future revenue streams are directly linked to debt repayment under adequate disclosures can benefit the borrower and protect longer-term creditor relationships.
  - Collateralized financing can cause harm when one or more criteria are met:
    - (i) it does not improve borrowing terms;
    - (ii) it weakens debt sustainability;
    - (iii) it is inadequately disclosed;
    - (iv) it does not respect negative pledge clauses.
- Challenges in restructuring:
  - Collateralization can provide de facto seniority to a creditor’s claim.
  - Official sector coordination (e.g., Paris Club, Common Framework) anchors negotiations around fair burden sharing, but the presence of private collateral can lead to impasses on the private sector side.
  - Official bilateral creditors may be reluctant to provide more debt relief to offset a lower private creditor contribution where private claims are collateralized, which can affect IMF financial support prospects.
  - Certain resource-backed loan contract features can make use of IMF’s Lending into Arrears Policy (LIA) practically impossible because the debtor country cannot run arrears to that creditor.
- Policy and capacity responses:
  - Broad consensus to increase awareness of benefits and risks of collateralized financing practices.
  - The IMF and World Bank highlighted findings and policy considerations from their 2020 and 2023 notes on collateralized transactions to help countries assess benefits and risks and adopt mitigating measures (including transparency and disclosure).
  - General support for helping debtor countries address these issues through trainings and technical assistance missions.

### GSDR technical work and next steps
- Recent and ongoing GSDR and related policy work:
  - G20 continued work to address debt vulnerabilities and drew lessons from Common Framework implementation and on climate-resilient debt clauses and debt swaps.
  - IMF and World Bank published a Supplementary Guidance Note on the Debt Sustainability Framework for Low-income Countries (LIC DSF) in August, providing guidance on climate risks, domestic public debt vulnerabilities, and LIC-DSF use in restructuring situations; comprehensive review of the LIC DSF advanced as part of regular review.
  - IMF finalizing a Guidance Note on sovereign arrears and financing assurances policies, and IMF’s role in debt restructuring situations—first comprehensive operational guidance replacing guidance previously available through different documents.
  - IMF and World Bank staff published a note on “Stepping Up Domestic Resource Mobilization: A New Joint Initiative From the IMF and World Bank” and a note on “Debt for Development Swaps: An Approach Framework”; World Bank published a technical note on its potential role in such transactions.
  - Technical workshops and meetings:
    - Technical workshop on comparability of treatment (CoT) organized on June 26 by the Brazilian G20 Presidency and the Paris Club.
    - GSDR Technical Meeting on SCDIs and collateralized financing practices held on July 8.
    - Open GSDR Workshop on liquidity challenges held on September 16.
    - GSDR Deputies met on October 9 to review and advance technical work and prepare the GSDR Principals meeting on October 23.
- GSDR Principals’ agreed priorities going forward:
  - Continue work on efficient, timely and predictable processes to resolve situations of unsustainable debt.
  - Clarify further the use of SCDIs in debt restructurings, especially assessment of comparability of treatment when SCDIs are used, including through a specific workshop.
  - Advance operational ways to address liquidity challenges (three-pillar approach and country-specific activation).
  - Deepen work on ways to build resilience, including improving debt transparency, debt management and debt reporting.
  - Give specific attention to ways to support building fiscal resilience in small states.

---

### Section 3: Addressing Current Liquidity Challenges

### Current liquidity pressures and drivers
- Solvency risks seem broadly contained, but many low-income countries (LICs) and some emerging markets (EMs) face significant liquidity pressures.
- Key drivers:
  - Series of major shocks since 2020.
  - Rise in global interest rates.
  - Large refinancing needs increasing gross financing needs.
  - Reversal of debt flows from bilateral and private creditors.
- Historical and recent flow metrics:
  - Private and bilateral net flows to IDA countries peaked in 2014 at US$1.8 billion, or 73 percent of total net flows.
  - Private and bilateral net flows declined to less than US$200 million in 2022, with private net flows turning negative.
- Concurrent needs and vulnerabilities:
  - Substantial investments required to advance toward the Sustainable Development Goals (SDGs), including adapting to climate change.
  - Large debt repayments due in the coming period heighten vulnerabilities across a range of countries.

### Three-pillar approach proposed by the IMF and World Bank
- Purpose:
  - To help LICs and vulnerable EMs address current liquidity challenges.
  - Targeted at countries whose debt is sustainable but experiencing temporary liquidity pressures, as assessed through debt sustainability analysis, and that are undertaking or committed to structural and fiscal reforms.
  - Constitutes a “menu of options” to be activated as a country-specific package tailored to each country’s circumstances and needs.
- Pillar I: Structural reforms and domestic resource mobilization
  - Supported by technical assistance, capacity development and policy advice.
  - Core elements governments must undertake:
    - Undertake structural reforms to boost growth and job creation.
    - Mobilize fiscal revenues to meet priority needs.
    - Improve the efficiency and effectiveness of public spending.
    - Strengthen the business environment to foster the domestic private sector and foreign direct investment.
    - Develop domestic financial markets to enhance access to financing.
- Pillar II: External financial support, including from the international financial institutions
  - Rationale: Structural reforms and resource mobilization will take time; interim international support is needed to meet financing needs and provide net positive flows, particularly in low-income countries.
  - Elements:
    - Support from bilateral and multilateral development partners, including concessional loans and grants, consistent with the strength and ambition of the domestic reform agenda and country needs.
    - The IMF and World Bank play catalytic roles in this collective effort.
    - For countries in a Fund-supported program, official bilateral creditors could contribute by aiming at maintaining, where possible, their exposures over the program period.
- Pillar III: Crowding-in more private finance and reducing debt servicing burdens where relevant
  - Aim: Crowd-in higher and more affordable inflows from private creditors and investors.
  - Measures to support this objective:
    - Improvements in the business environment and progress on domestic reforms.
    - Introduction of new solutions for countries without solvency problems but with high debt servicing burdens, including:
      - Greater use of risk-sharing instruments by bilateral and multilateral partners to incentivize new or higher inflows from private creditors.
      - Liability management operations such as debt for development swaps and debt buy backs.

### Consensus, coordination, and outstanding work
- Meetings advancing consensus:
  - GSDR Open Workshop on September 16 and GSDR Deputies meeting on October 9 helped advance consensus while recognizing further work is needed.
- Broad consensus points:
  - Urgency to address liquidity challenges that impact growth and development prospects of many LICs and some EMs and which, if unaddressed, could morph into a debt crisis.
  - Importance of combining different levers:
    - Support countries’ efforts to define and implement ambitious domestic reforms (enhance growth and job creation, mobilize public revenues, develop domestic capital markets, improve spending efficiency, public financial management, and governance).
    - Provide adequate external financial support from IFIs and mobilize official bilateral and private creditors, possibly using credit enhancements where relevant.
  - Need for coordinated efforts while keeping a bottom-up, country-specific approach, building on experience, recognizing causes and sizes of liquidity challenges differ across countries.
- Agreement to continue discussions in the coming months.

### Special attention: Small island developing states (SIDS)
- SIDS face particular vulnerabilities that call for special efforts.
- Policy emphases for SIDS:
  - Robust efforts to expand domestic revenue mobilization.
  - Stronger fiscal discipline supported by well-designed fiscal rules with flexible fiscal anchors.

*Source: gsdr-cochairs-progress-report-october-2024 - Executive Summary; Section 3: Addressing Current Liquidity Challenges (October 23, 2024).*

### Executive Summary

### gsdr-cochairs-progress-report-october-2024 - Executive Summary

### Progress since April 2024 and status of ongoing restructurings
- Ongoing restructuring cases have reached important milestones, both under the Common Framework (CF) and outside.
- The Common Framework is delivering faster and more predictable debt treatments, as evidenced by Ghana and Ethiopia.
- Restructuring processes outside the Common Framework are also improving, as evidenced by Sri Lanka.
- Specific case updates:
  - Ghana:
    - Reached an agreement in principle with its international bondholders in June.
    - Completed the 2nd Review of its Fund-supported program on June 28.
    - Finalized its Eurobond exchange in October.
  - Sri Lanka:
    - Reached a final agreement with the OCC and China EXIM in June.
    - Reached an agreement in principle with its international bondholders in September.
    - Completed the 2nd Review of its Fund-supported program on June 12.
  - Ethiopia:
    - Reached staff-level agreement with the IMF in May.
    - The OCC (co-chaired by China and France) met in July and provided financing assurances.
    - Fund-supported program approved by the IMF Board on July 29.
    - First review approved on October 18.
- Other cases noted as advancing: Zambia, Suriname, and Chad (with Chad’s 1st and 2nd Reviews combined). Malawi noted as of a different nature that does not involve creditor coordination challenges central to GSDR work.

### Need to continue building common understanding; debt vulnerabilities and liquidity pressures
- Debt vulnerabilities remain elevated and uncertainties in the global economy are significant.
- It is critical to continue advancing and solidifying common understanding on key technical issues to ensure efficient, timely and predictable restructuring processes and to strengthen the debt restructuring architecture.
- Supporting countries where debt is sustainable but liquidity pressure is high has become a priority:
  - Solvency risks seem broadly contained, but many low-income countries and some emerging markets face significant liquidity pressures.
  - If unaddressed, liquidity challenges could morph into a debt crisis.

### IMF–World Bank three-pillar approach to address liquidity challenges
- The IMF and World Bank proposed a three-pillar approach in a joint Bank-Fund non paper:
  - Pillar 1: Structural reforms to boost growth and jobs and mobilize domestic resources, supported by capacity development.
  - Pillar 2: Adequate financial support, including from international financial institutions.
  - Pillar 3: Actions to reduce debt servicing burdens, including through greater use of risk-sharing instruments by external partners, where relevant, to incentivize higher inflows from private creditors.
- Eligibility and implementation:
  - Countries whose debt is sustainable, but experiencing temporary liquidity pressures, as assessed through debt sustainability analysis, and that are undertaking or committed to structural and fiscal reforms, could make use of this three-pillar approach.
  - The approach constitutes a “menu of options” from which a country-specific package would be activated, tailored to the country’s unique circumstances and needs.
- Broad consensus in GSDR:
  - Urgency to tackle liquidity challenges and importance of combining different support mechanisms.
  - Need for coordinated efforts while keeping a bottom-up, country-specific approach.
  - Agreement to continue discussions to flesh out the consensus on how to address these challenges.

### State-Contingent Debt Instruments (SCDIs)
- Definition and types:
  - SCDIs are debt instruments with cash flows that differ according to future states of the world.
  - Typical SCDIs include value-recovery instruments (VRIs) and climate resilient debt clauses (CRDCs).
  - Examples: GDP warrants in Argentina (2005/10), Greece (2012), Ukraine (2015); upside instrument linked to Citizenship by Investment revenues in Grenada (2015); VRIs in many Brady restructurings; Suriname’s 2023 restructuring included a VRI linked to future oil revenues.
  - Recent considerations: Zambia (SCDI linked to future debt carrying capacity or exports); Sri Lanka (SCDI linked to future GDP or governance improvements). Ghana did not include any SCDI.
- Benefits and limitations:
  - SCDIs can help bridge debtor-creditor gaps in restructurings where uncertainty is high, but they should not be the norm.
  - Costs to the debtor:
    - SCDIs are not “free” and change the balance of risks; may risk “selling off” future revenues, limit ability to rebuild buffers, or trigger higher pay-offs when capacity to repay is low.
  - Investor perspective:
    - Investors have typically shunned and undervalued VRIs due to complexity, lack of liquidity, limited correlation with conventional fixed-income portfolios, and susceptibility to government influence.
    - From the borrower’s perspective, VRIs have been limited by undervaluation, lack of payout caps, indexation lag, political incentives for overly generous terms, moral hazard, and monitoring capacity challenges—especially for LICs.
- Design and safeguards when used:
  - When used, SCDIs should have well-defined verifiable triggers and be consistent with debt sustainability assessments and IMF program parameters in all scenarios.
  - Consider merits of payout caps and mechanisms to ensure payments can be adjusted both up and down.
  - Design elements recommended:
    - (i) Careful selection of verifiable triggers reflecting increased repayment capacity.
    - (ii) Ensure payments associated with SCDIs do not compromise debt sustainability prospects (e.g., payout caps).
    - (iii) Use market-friendly design where feasible, such as one-time tests and shorter-maturity instruments to limit uncertainty, subject to debt sustainability risks being managed.
- Comparability of Treatment (CoT) challenges:
  - Assessing CoT is complicated by SCDIs due to higher uncertainty over cash flows and lack of agreement on ex ante vs ex post CoT assessment.
  - Differences between private and official creditor SCDIs, or the presence in only one creditor group, may require additional iterations and can impact restructuring timelines.
  - Early engagement across creditor groups can facilitate common understanding.
  - GSDR members supported bringing further clarity on the treatment of SCDIs in CoT assessments through a specific workshop.

### Collateralized financing from private creditors
- Benefits and risks depend on specific financing terms:
  - Collateralized financing of projects where future revenue streams are directly linked to debt repayment under adequate disclosures can benefit the borrower and protect longer-term creditor relationships.
  - Collateralized financing can cause harm when one or more criteria are met:
    - (i) it does not improve borrowing terms;
    - (ii) it weakens debt sustainability;
    - (iii) it is inadequately disclosed;
    - (iv) it does not respect negative pledge clauses.
- Challenges in restructuring:
  - Collateralization can provide de facto seniority to a creditor’s claim.
  - Official sector coordination (e.g., Paris Club, Common Framework) anchors negotiations around fair burden sharing, but the presence of private collateral can lead to impasses on the private sector side.
  - Official bilateral creditors may be reluctant to provide more debt relief to offset a lower private creditor contribution where private claims are collateralized, which can affect IMF financial support prospects.
  - Certain resource-backed loan contract features can make use of IMF’s Lending into Arrears Policy (LIA) practically impossible because the debtor country cannot run arrears to that creditor.
- Policy and capacity responses:
  - Broad consensus to increase awareness of benefits and risks of collateralized financing practices.
  - The IMF and World Bank highlighted findings and policy considerations from their 2020 and 2023 notes on collateralized transactions to help countries assess benefits and risks and adopt mitigating measures (including transparency and disclosure).
  - General support for helping debtor countries address these issues through trainings and technical assistance missions.

### GSDR technical work and next steps
- Recent and ongoing GSDR and related policy work:
  - G20 continued work to address debt vulnerabilities and drew lessons from Common Framework implementation and on climate-resilient debt clauses and debt swaps.
  - IMF and World Bank published a Supplementary Guidance Note on the Debt Sustainability Framework for Low-income Countries (LIC DSF) in August, providing guidance on climate risks, domestic public debt vulnerabilities, and LIC-DSF use in restructuring situations; comprehensive review of the LIC DSF advanced as part of regular review.
  - IMF finalizing a Guidance Note on sovereign arrears and financing assurances policies, and IMF’s role in debt restructuring situations—first comprehensive operational guidance replacing guidance previously available through different documents.
  - IMF and World Bank staff published a note on “Stepping Up Domestic Resource Mobilization: A New Joint Initiative From the IMF and World Bank” and a note on “Debt for Development Swaps: An Approach Framework”; World Bank published a technical note on its potential role in such transactions.
  - Technical workshops and meetings:
    - Technical workshop on comparability of treatment (CoT) organized on June 26 by the Brazilian G20 Presidency and the Paris Club.
    - GSDR Technical Meeting on SCDIs and collateralized financing practices held on July 8.
    - Open GSDR Workshop on liquidity challenges held on September 16.
    - GSDR Deputies met on October 9 to review and advance technical work and prepare the GSDR Principals meeting on October 23.
- GSDR Principals’ agreed priorities going forward:
  - Continue work on efficient, timely and predictable processes to resolve situations of unsustainable debt.
  - Clarify further the use of SCDIs in debt restructurings, especially assessment of comparability of treatment when SCDIs are used, including through a specific workshop.
  - Advance operational ways to address liquidity challenges (three-pillar approach and country-specific activation).
  - Deepen work on ways to build resilience, including improving debt transparency, debt management and debt reporting.
  - Give specific attention to ways to support building fiscal resilience in small states.

*Source: gsdr-cochairs-progress-report-october-2024 - Executive Summary*

### Section 3: Addressing Current Liquidity Challenges

### Section 3: Addressing Current Liquidity Challenges

### Current liquidity pressures and drivers
- Solvency risks seem broadly contained, but many low-income countries (LICs) and some emerging markets (EMs) face significant liquidity pressures.
- Key drivers:
  - Series of major shocks since 2020.
  - Rise in global interest rates.
  - Large refinancing needs increasing gross financing needs.
  - Reversal of debt flows from bilateral and private creditors.
- Historical and recent flow metrics:
  - Private and bilateral net flows to IDA countries peaked in 2014 at US$1.8 billion, or 73 percent of total net flows.
  - Private and bilateral net flows declined to less than US$200 million in 2022, with private net flows turning negative.
- Concurrent needs and vulnerabilities:
  - Substantial investments required to advance toward the Sustainable Development Goals (SDGs), including adapting to climate change.
  - Large debt repayments due in the coming period heighten vulnerabilities across a range of countries.

### Three-pillar approach proposed by the IMF and World Bank
- Purpose:
  - To help LICs and vulnerable EMs address current liquidity challenges.
  - Targeted at countries whose debt is sustainable but experiencing temporary liquidity pressures, as assessed through debt sustainability analysis, and that are undertaking or committed to structural and fiscal reforms.
  - Constitutes a “menu of options” to be activated as a country-specific package tailored to each country’s circumstances and needs.

- Pillar I: Structural reforms and domestic resource mobilization
  - Supported by technical assistance, capacity development and policy advice.
  - Core elements governments must undertake:
    - Undertake structural reforms to boost growth and job creation.
    - Mobilize fiscal revenues to meet priority needs.
    - Improve the efficiency and effectiveness of public spending.
    - Strengthen the business environment to foster the domestic private sector and foreign direct investment.
    - Develop domestic financial markets to enhance access to financing.

- Pillar II: External financial support, including from the international financial institutions
  - Rationale: Structural reforms and resource mobilization will take time; interim international support is needed to meet financing needs and provide net positive flows, particularly in low-income countries.
  - Elements:
    - Support from bilateral and multilateral development partners, including concessional loans and grants, consistent with the strength and ambition of the domestic reform agenda and country needs.
    - The IMF and World Bank play catalytic roles in this collective effort.
    - For countries in a Fund-supported program, official bilateral creditors could contribute by aiming at maintaining, where possible, their exposures over the program period.

- Pillar III: Crowding-in more private finance and reducing debt servicing burdens where relevant
  - Aim: Crowd-in higher and more affordable inflows from private creditors and investors.
  - Measures to support this objective:
    - Improvements in the business environment and progress on domestic reforms.
    - Introduction of new solutions for countries without solvency problems but with high debt servicing burdens, including:
      - Greater use of risk-sharing instruments by bilateral and multilateral partners to incentivize new or higher inflows from private creditors.
      - Liability management operations such as debt for development swaps and debt buy backs.

### Consensus, coordination, and outstanding work
- Meetings advancing consensus:
  - GSDR Open Workshop on September 16 and GSDR Deputies meeting on October 9 helped advance consensus while recognizing further work is needed.
- Broad consensus points:
  - Urgency to address liquidity challenges that impact growth and development prospects of many LICs and some EMs and which, if unaddressed, could morph into a debt crisis.
  - Importance of combining different levers:
    - Support countries’ efforts to define and implement ambitious domestic reforms (enhance growth and job creation, mobilize public revenues, develop domestic capital markets, improve spending efficiency, public financial management, and governance).
    - Provide adequate external financial support from IFIs and mobilize official bilateral and private creditors, possibly using credit enhancements where relevant.
  - Need for coordinated efforts while keeping a bottom-up, country-specific approach, building on experience, recognizing causes and sizes of liquidity challenges differ across countries.
- Agreement to continue discussions in the coming months.

### Special attention: Small island developing states (SIDS)
- SIDS face particular vulnerabilities that call for special efforts.
- Policy emphases for SIDS:
  - Robust efforts to expand domestic revenue mobilization.
  - Stronger fiscal discipline supported by well-designed fiscal rules with flexible fiscal anchors.

*Source: gsdr-cochairs-progress-report-october-2024 - Section 3: Addressing Current Liquidity Challenges (gsdr-cochairs-progress-report-october-2024 - Section 3: Addressing Current Liquidity Challenges, October 23, 2024).*

---


_Source: https://www.imf.org/-/media/files/about/faq/gsdr/gsdr-cochairs-progress-report-october-2024.pdf_