## Better Borrowing

## Source details

**Canonical URL:** [Better Borrowing](https://www.imf.org/en/publications/fandd/issues/2021/12/book-review-better-borrowing-arora)

## Other formats

- [Markdown version](/en/publications/fandd/issues/2021/12/book-review-better-borrowing-arora/index.md)
- [Structured JSON version](/en/publications/fandd/issues/2021/12/book-review-better-borrowing-arora/index.json)
- [Bundle manifest](/en/publications/fandd/issues/2021/12/book-review-better-borrowing-arora/bundle-manifest.json)

## Bibliographic details
- Authors: VIVEK ARORA
- Published: December 2, 2021

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### Overview
- Title: Better Borrowing
- Review by: VIVEK ARORA
- Publication: F&D Magazine
- Date: December 2021
- Read time note: Less than a minute(0 words) Read
- Reviewed book: Where Credit Is Due: How Africa’s Debt Can Be a Benefit, Not a Burden
- Author of book: Gregory Smith
- Publisher details: Hurst Publishers, London, UK, 2021, 240 pp., $34.95

### Main thesis and purpose
- Gregory Smith proposes an approach called “borrowing with purpose” that links public borrowing with clear development strategies.
- Emphasis on better coordination among official creditors, more responsible actions by private creditors, and flexibility by the “umpires and architects” of the international system.
- The book presents “country stories” in each chapter discussing particular African countries.

### Debt landscape and trends
- Africa’s debt has risen since 2010 after significant reductions through the Heavily Indebted Poor Country and the Multilateral Debt Relief initiatives as well as workouts with official and private creditors.
- Recent debt is characterized as less concessional and more commercial, involving diverse lenders including China and Africa’s regional institutions.
- Countries increasingly issue Eurobonds and access global financial markets, which:
  - Help finance budgets amid declining foreign aid.
  - Provide a signal for attracting other capital flows.
  - Carry new risks.

### Role of China
- Smith devotes a chapter to China’s lending to Africa, covering:
  - Scale, terms, nature, purposes, and risks of China’s lending.
  - China’s debt relief to African countries over the decades.

### Historical assessment and international system
- The international community’s debt relief to Africa during the debt crises of the 1980s and 1990s was, Smith argues, insufficient.
- Smith attributes part of that insufficiency to gaps in understanding how much debt is too much.
- He criticizes adjustment programs supported by multilateral institutions during that period but does not fully develop this critique.
- Looking ahead, Smith’s main message is to aim for an “evolution, not a revolution” of the international system for debt workouts, referencing efforts such as the G20 Common Framework.

### Policy recommendations (Smith’s prescriptions for “better borrowing”)
- Borrow prudently.
- Use debt for productive investment.
- Conduct active debt management.
- Increase debt transparency.
- Deepen domestic markets.
- Provide more flexible external financing.
- Improve coordination among creditors and encourage more virtuous behavior by private creditors.
- Link public borrowing with clear development strategies.

### Critique and limitations noted by reviewer
- The reviewer notes the book’s commonsense approach and engaging style but suggests:
  - Operational definitions could help for terms such as “calmer” capital, “smarter” investment, and policies that are “fine.”
  - Some IMF readers may react to the use of “bailouts” to refer to Fund programs.
  - The critique of past multilateral adjustment programs is not fully developed.

### Conclusion and audience
- The reviewer characterizes the book as a valuable addition to the literature and “well worth reading” for those interested in African debt issues.
- Reviewer’s affiliation: VIVEK ARORA is a deputy director in the IMF’s Middle East and Central Asia Department.

*F&D Magazine — Better Borrowing — VIVEK ARORA — December 2021*

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## Content in this bundle

- **استعراض الكتب**
  - [استعراض الكتب (Markdown version)](/-/media/files/publications/fandd/article/2021/december/ar/book-arora-p69.pdf.md){rel="alternate" type="text/markdown"}
  - [استعراض الكتب (PDF)](/-/media/files/publications/fandd/article/2021/december/ar/book-arora-p69.pdf){rel="external" type="application/pdf"}
- **Better Borrowing**
  - [Better Borrowing (Markdown version)](/-/media/files/publications/fandd/article/2021/december/book-arora.pdf.md){rel="alternate" type="text/markdown"}
  - [Better Borrowing (PDF)](/-/media/files/publications/fandd/article/2021/december/book-arora.pdf){rel="external" type="application/pdf"}
- **Críticas de libros ● Finanzas y Desarrollo ● Diciembre de 2021**
  - [Críticas de libros ● Finanzas y Desarrollo ● Diciembre de 2021 (Markdown version)](/-/media/files/publications/fandd/article/2021/december/es/book-arora-p69.pdf.md){rel="alternate" type="text/markdown"}
  - [Críticas de libros ● Finanzas y Desarrollo ● Diciembre de 2021 (PDF)](/-/media/files/publications/fandd/article/2021/december/es/book-arora-p69.pdf){rel="external" type="application/pdf"}
- **Notes de lecture**
  - [Notes de lecture (Markdown version)](/-/media/files/publications/fandd/article/2021/december/fr/book-arora-p69.pdf.md){rel="alternate" type="text/markdown"}
  - [Notes de lecture (PDF)](/-/media/files/publications/fandd/article/2021/december/fr/book-arora-p69.pdf){rel="external" type="application/pdf"}
- **Where Credit Is Due: How Africa’s Debt Can Be a Benefit, Not a Burden**
  - [Where Credit Is Due: How Africa’s Debt Can Be a Benefit, Not a Burden (Markdown version)](/-/media/files/publications/fandd/article/2021/december/ru/book3.pdf.md){rel="alternate" type="text/markdown"}
  - [Where Credit Is Due: How Africa’s Debt Can Be a Benefit, Not a Burden (PDF)](/-/media/files/publications/fandd/article/2021/december/ru/book3.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/fandd/issues/2021/12/book-review-better-borrowing-arora_