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Hidden Debt solutions to avert the next financial crisis in South Asia

Hidden Debt solutions to avert the next financial crisis in South Asia

The COVID-19 (coronavirus) crisis has expanded public direct interventions through state banks and enterprises to aid economies, but with possible risks to debt sustainability, long-term productivity, and equality. Compared with other regions, South Asia is more exposed to the risk of hidden debt and mounting contingent liabilities from SOEs, SOCBs, and PPPs because of its greater reliance on state off-balance sheet operations. Financial distress of public agents is not a rare event in South Asia. Off–balance sheet operations of both national and subnational governments become distressed frequently SOCBs fare the worst. […]