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Debt Management for Parliaments

Public debt has been growing globally for decades, and the fallout from the recent COVID-19 pandemic has exacerbated what were already unprecedented levels of debt. This is as true for low- and middle-income countries as it is for high-income countries, however, the former are generally in a far less sustainable position to service and eventually pay down their debts. These debts are often taken on for good reasons, whether in response to exogenous shocks such as natural disasters, or as we have seen pandemics, as well as to invest in important infrastructure projects and in attaining the Sustainable Development Goals (SDGs). Sometimes, however, due to a lack of effective oversight, unsustainable debt loads are taken on and citizens are left on the hook for paying back funds that may have served no effective purposes. Public debt disproportionately impacts women, especially women with intersecting identities.1 Often, high levels of debt lead to cuts to social spending for which women are the most dependent. This can be particularly difficult for women in low-income countries where there are often fewer opportunities for women than men, as well as significant constraints to finding work or to succeed in the workplace. Effective public debt management is always integral to assuring long-term sustainability, and this starts with effective parliamentary oversight. While budgeting, borrowing and spending are generally under the purview of the executive branch of government, it is incumbent that the legislature serves as an effective counterbalance to ensure sound decisions are taking place that will benefit the country both short and long term. There are several important actors as well as entry points for these actors to influence the budget and oversee decisions related to public debt management. These institutional actors and entry points together form what can be referred to as the “debt management universe.”