Sunday 22/June/2025 – 04:17 PM
Dr. Mohamed Moait – Executive Director of the International Monetary Fund, a representative of the Arab countries, the Maldives and the former Minister of Finance said that the global market fluctuations contribute to increasing the risks, which impose additional pressure on public resources and growth, and the high financing needs, which greatly affects the debt rates to the gross domestic product at a time when the levels of debt in many countries rise, which indicates the economic repercussions of the current state of uncertainty over public debt Financial and monetary policies.
He explained during the General Religion Conference in a changing world: sustainable strategies to face global economic challenges “organized by the Arab Organization for Administrative Development of the League of Arab States in cooperation with the Central Finance Department in Sharjah, and with the high -level participation of leaders of financial institutions, decision -makers, and international experts, to double the global public debt since 2010, to reach 97 trillion dollars in 2023, and it is expected to increase by an additional 2.8% of GDP in 2025, approaching 100% of GDP in 2030.
Emerging economies
He explained that the size of the cost of debt service is one of the biggest current obstacles facing emerging economies, as more than 40% of the world’s population lives in countries spending more benefits of debt than it spends on education or health, as the exacerbation of the debt service burden leads to the transfer of basic resources away from the development needs in many countries.
On the other side The exchange rates and their decline against the dollar, especially in developing countries.
Kidney economics factors and financial and monetary factors
Moait mentioned the most important risks of developing countries represented by the exchange rate and interest rates. He explained the role of international financing institutions regarding the support of developing countries to rely on innovative financial tools that enable the sustainability of public debt, foremost of which are risk reduction tools, which include guarantees and insurance on debt tools, in addition to obtaining financing in local currencies and supporting the cost of hedging transactions against exchange rates and interest through some mechanisms, including mixed financing to reduce interest rate fluctuations and exchange rates, which helps to stabilize cash flows Reducing borrowing costs and mitigating the possible negative effects of market fluctuations on the state’s public finances,
He drew attention to the importance of reforming the joint framework of the Group of Twenty by expanding eligibility criteria for involving medium -income countries that suffer from financial hardship in debt restructuring operations.
Moait concluded his speech with some recommendations for governments to ensure the sustainability of public debt, based on three main axes, namely economic diversity and enhancing the role of the private sector in the economy, in addition to relying more on mechanization, industrial intelligence programs and blockchain technologies to enhance efficiency and productivity, noting that the process of supporting the sustainability of public debt is based on unremitting efforts from all parties, whether by the governments concerned or through international financing institutions Multi -party banks and relevant bodies.
