Debt management capacity: a tale of three Asias

Over the last 2 decades, many Asian countries have sought to build their capacity to manage public debt and develop their domestic debt markets. This has contributed to greater resilience to shocks and some have been well placed to weather the coronavirus disease (COVID-19) crisis. But given the diversity of countries in developing Asia - ranging from governments that rely on official external sources of finance to countries that borrow entirely in domestic markets - the picture is mixed, and strengthening of institutions and markets is required in most. Also, public debt managers can take advantage of new opportunities for borrowing and to manage fiscal risks more effectively. We discuss four in this chapter: (i) environmental, social, and governance investing; (ii) sovereign asset–liability management; (iii) management of explicit contingent liabilities; and (iv) transferring risks arising from commodity prices and natural disasters to markets.