1. DeMPA and Small States
A comparative snapshot
Edgardo Favaro
Sustaining Development in Small States in a Turbulent Global Economy,
July 6-7, 2009

2. Roadmap
1. General setting
o What is DeMPA? Why have a DeMPA?
o Fitting DeMPA into the big picture
2. Are small states different?
o Stylized facts of small states
o DeMPA in small states
o A comparative analysis
5. Concluding remarks

3. What is DeMPA – An Overview
Analytical tool with following attributes:

4. What is DeMPA – the PIs
Governance and Strategy Development
DPI-1 Legal Framework
DPI-2 Managerial Structure
DPI-3 Debt Management Strategy
DPI-4 Evaluation of Debt Management Operations
DPI-5 Audit
Coordination with Macroeconomic Policies
DPI-6 Coordination with Fiscal Policy
DPI-7 Coordination with Monetary Policy
Borrowing and Related Financing Activities
DPI-8 Domestic Borrowing
DPI-9 External Borrowing
DPI-10 Loan Guarantees, On-lending and Derivatives
Cash Flow Forecasting and Cash Balance Management
DPI-11 Cash Flow Forecasting and Cash Balance Management
Operational Risk Management
DPI-12 Debt Administration and Data Security
DPI-13 Segregation of Duties, Staff Capacity and Business Continuity
Debt Records and Reporting
DPI-14 Debt Records
DPI-15 Debt Reporting

5. What is DeMPA – example of
dimensions within PI

6. What is DeMPA – scoring
method
Scoring method - quantifiable scores (A to D)
i) Meet minimum requirement = Score C
Important for effective debt management
ii) Absence of minimum requirement = Score D
Signals an area of priority attention
iii) Sound practice = Score A (B intermediate for
more granularity)
iv) Not rated – if process/system does not exist (e.g.,
derivatives)

7. So what? - motivation for DeMPA
• HIPC and MDRI debt relief – opened space
for new debt
• Mounting fiscal deficits
• Current volatile and uncertain financial
environment
⇒ institutional framework necessary to
manage public debt prudently

8. DeMPA and the big picture

9. DeMPA: Follow-up actions
Possible
follow-ups
Training/TA
examples

10. Scope and distribution of DeMPA
assessments as of end-May

11. Small states – stylized facts

12. Small states– indebtedness

13. Small states– indebtedness

14. What about our DeMPA sample?

15. Small economies – indebtedness
Corollary:
More urgent need to build debt
management capacity.
Key question:
How to operationalize given small market
size and lacking capacity?

16. DeMPA in small states: basic statistics

17. DeMPA in small states (sample: 6)

18. DeMPA outside small states (sample: 21)

19. Comparing DeMPA outcomes: across
countries for each PI
PIs

20. Comparing DeMPA outcomes: across
PI for each country
PI ratings: >D
Small states PI Outside small
states PI
Max 8 (53%) 14 (93%)
Min 2 (13%) 1 (7%)
Median 30% 40%
Average 30% 44%
• an average small state has 30% of its PI above the minimum
requirement (4.5 PI out of 15)
• an average outside small state has 44% of its PI above the
minimum requirement (6.5 PI out of 15), but larger variability

21. Concluding remarks