Building capacity for sustainable sovereign debt management in Central and West Asia was the focus of a residential workshop cohosted by the Multilateral Cooperation Center for Development Finance (MCDF) and Central Asia Regional Economic Cooperation (CAREC) Institute in Urumqi, China on 18-21 November.
Based on MCDF’s Sustainable Financing of Development and Infrastructure Workshop Series and companion handbook, the MCDF-CAREC Institute workshop provided officials from borrowing countries and financiers insights on debt management strategy, risk mitigation, debt sustainability assessment, and debt restructuring. It also served as a platform for sharing experiences, lessons, and new ideas for increasing development finance in CAREC countries.
Held at the CAREC Institute’s new Urumqi training facility, the workshop was the first residential training offered by MCDF, and MCDF’s first knowledge-sharing activity conducted with the CAREC Institute. It welcomed participating officials from Azerbaijan, China, Georgia, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, and Turkmenistan.
“Promoting the financing of infrastructure in a fiscally sustainable way is one of MCDF’s core objectives,” said MCDF CEO Zhongjing Wang, in opening remarks. “We want lending to be responsible for both borrowers and lenders, to fit each borrower’s macroeconomic reality, and to be part of the solution.”
“This residential workshop further demonstrates MCDF’s strong commitment to fostering high-quality connectivity in CAREC countries, which is critical for harnessing trade and economic opportunities across the region and through enhanced linkages with Asia and Europe,” he added.
MCDF organized its first regional investment facilitation workshop in 2021 on Central and West Asia, helping to introduce the region’s connectivity projects to potential financiers. Central Asia is also where MCDF is conducting its first connectivity infrastructure study, together with partners, mapping both existing and potential connectivity infrastructure investments.
The MCDF-CAREC Institute residential workshop was led by Mr. Marcelo Giugale, a Georgetown University professor and the MCDF sustainable financing handbook’s editor. It highlighted World Bank, International Monetary Fund (IMF), and other International Financial Institution (IFI) standards and best practices on debt sustainability, drawing on case studies from the region and elsewhere.
The workshop uniquely facilitated dialogue between governments in Central and West Asia and financiers, in particular, multilateral and national development banks and commercial financiers, for better mutual understanding.
A session on development finance explored the challenges that lenders face when committing capital to the CAREC region, such as a lack of bankable projects and IMF debt limits for some countries. It also offered borrowing country officials an opportunity to share their perspectives on these challenges, who requested greater technical assistance from IFIs on project preparation.
Both sides agreed on the importance of increasing financing in local currencies, which can reduce exchange rate risks and thus promote debt sustainability.
“The mix of borrowers and lenders creates a unique opportunity for peer-to-peer learning,” said Dr. Jingjing Huang, Deputy Director One of the CAREC Institute, in reference to the workshop’s participants. “It allows us to engage in open, constructive dialogue, which is essential for improving collaboration and strengthening the borrower-lender relationship.”
“The discussions and exchanges that take place here can pave the way for more innovative, mutually beneficial approaches to debt management,” she added.
Mr. Liu Weidong, Urumqi’s Shuimogou District Mayor, stressed the CAREC Institute’s value as MCDF’s partner for guiding Central and West Asia’s sustainable development.
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David Hendrickson
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david.hendrickson@themcdf.org
