Hidden Debt : : Solutions to Avert the Next Financial Crisis in South Asia.

Hidden Debt : : Solutions to Avert the Next Financial Crisis in South Asia.

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Bibliographic Details
Superior document:South Asia Development Matters Series
:
Melecky, Martin.
Place / Publishing House:Washington, D. C. : : World Bank Publications,, 2021.
©2021.
Year of Publication:2021
Edition:1st ed.
Language:English
Series:South Asia Development Matters Series
Online Access:
Physical Description:1 online resource (197 pages)
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Table of Contents:
  • Front Cover
  • Contents
  • Acknowledgments
  • Executive Summary
  • Spotlight ES.1
  • Abbreviations
  • Overview
  • Analytical Framework
  • Empirical Findings
  • Policy Recommendations
  • Notes
  • References
  • 1 Public-Private Partnerships in South Asia: Managing the Fiscal Risks from Hidden Liabilities While Delivering Efficiency Gains
  • The Need to Carefully Manage the Fiscal and Economic Risks of PPPs
  • Balancing the Efficiency Gains from PPPs against Their Risks and Liabilities
  • Booming Infrastructure PPPs, Their Country and Sector Distribution, and Signs of Distress in South Asia
  • Fiscal Risks from Contingent Liabilities Due to Early Termination of PPPs
  • Features of Contract Design That Matter: Exploring the Link between PPP Contract Design and Early Terminations of Highway PPPs in India
  • Improving Government Capacity, Due Diligence, and Contract Design to Better Manage the Fiscal Risks of the Growing PPP Programs in South Asia
  • Annex 1A. Methodology to Determine the Value at Risk of a Public-Private Partnership
  • Annex 1B. Definitions of Variables
  • Annex 1C. Distribution of South Asian Public-Private Partnership Projects by Sector
  • Annex 1D. Imputing the Missing Values for Predictions
  • Annex 1E. Model Selection
  • Annex 1F. Estimation Tables
  • Notes
  • References
  • 2 State-Owned Banks versus Private Banks in South Asia: Agency Tensions, Susceptibility to Distress, and the Fiscal and Economic Costs of Distress
  • The Upsides and Downsides of State-Owned Commercial Banks
  • The Omnipresence of State-Owned Commercial Banks in South Asia
  • Bank Business Models by Ownership Type: The Example of India
  • Understanding Bank Distress and Its Main Factors
  • Analyzing the Effect of Firms' Banking with SOCBs Compared with Private Banks
  • Policy Recommendations
  • Annex 2A. Methodology for Determining Bank Distress.
  • Annex 2B. Regression Tables: Probability of Distress for South Asian Banks and Adjustments to Distress, 2009-18
  • Annex 2C. Regression Tables for South Asian Scheduled Commercial Banks: Country Results, 2009-18
  • Notes
  • References
  • 3 South Asia's State-Owned Enterprises: Surprise Liabilities versus Positive Externalities
  • The Importance of Paying More Attention to the Hidden Liabilities of SOEs in South Asia
  • Describing the Opaque and Complex SOE Sector in South Asia Using Data
  • Analyzing the Roots and Extent of Hidden Liabilities in South Asian SOEs
  • What Drives the Contingent Liabilities from SOEs?
  • The SOE Sector Has a Role to Play in South Asia, Such as through Its Long-Term Investment in R&amp
  • D and Positive Spillovers on Private Firms
  • Only a Combination of Internal and External Policy Reforms Can Help Better Manage Contingent Liabilities from SOEs in South Asia
  • Annex 3A. Sources of Data about South Asian SOEs
  • Annex 3B. Summary Statistics and Estimations for Indian Enterprises
  • Annex 3C. Productivity Estimation
  • Notes
  • References
  • 4 Subnational Governments in South Asia: Balancing the Fiscal Risks of Government Decentralization with the Returns
  • The Promise and Risks of Fiscal Decentralization in South Asia
  • The Unclear Extent of Subnational Fiscal Liabilities and Rising Fiscal Risks in South Asia
  • Fiscal Responsibility Legislation and Subnational Fiscal Risks
  • Subnational Debt, Data, and Transparency: Lessons from Pakistan
  • Estimating Contingent Liability Shocks, Adjustment Costs, and Mitigating Factors Using Data for India
  • Results: Examining the Occurrence of Contingent Liability Shocks
  • Improved Transparency and Fiscal Rules, the Disciplining Role of Markets, and Better Intergovernmental Frameworks Are Needed to Achieve Better Subnational Fiscal Outcomes in South Asia
  • Annex 4A. Methodology.
  • Annex 4B. The Kalman Filter
  • Annex 4C. Regression Tables
  • Notes
  • References
  • Boxes
  • Box ES.1 Applying the Purpose, Incentives, Transparency, and Accountability (PITA) Recommendations
  • Box 1.1 The Hidden Debt of National Highways in India
  • Box 1.2 Low-, Medium-, and High-Risk Scenarios for Computing Losses to the Government from Contingent Liabilities of Public-Private Partnerships
  • Box 2.1 Main Findings of the Overall Analysis
  • Box 4.1 Recommendations for Improving Fiscal Reporting and Transparency in Pakistan
  • Figures
  • Figure O.1 Some South Asian Governments (India, Pakistan) Use State-Owned Commercial Banks, State-Owned Enterprises, and Public-Private Partnerships More Commonly Than the Global Benchmark While Others (Bangladesh, Sri Lanka) Are Catching Up
  • Figure O.2 Analytical Framework: Links from Distress to Adjustments to Impacts
  • Figure O.3 Highlights of the Report's Findings on Distress, Adjustments, and Impacts
  • Figure O.4 State-Owned Commercial Banks Adjust Differently from Private Banks in Times of Distress, 2009-18
  • Figure O.5 Annual Government Support for South Asian State-Owned Enterprises Could Account for More Than 2 Percent of GDP, on Average, Depending on the Country, 2015-17
  • Figure O.6 A Profound Macrofinancial Crisis Could Trigger Failures among Public-Private Partnerships That Would Cost South Asian Governments up to 4 Percent of Revenues
  • Figure O.7 The Liabilities of Loss-Making State-Owned Enterprises in India, Pakistan, and Sri Lanka Have Been Huge, but More Than 80 Percent of Losses in Each Country Have Occurred in Only the Top 10 Loss-Makers
  • Figure O.8 Local Investments in Indian States Fall Significantly with a Contingent Liability Shock, Keep Dropping the Year After, and Stay Well Below the Trend for Three Years.
  • Figure O.9 Checks and Balances on Government Executives Help Prevent Distress of Public-Private Partnerships
  • Figure 1.1 Active Portfolio of Public-Private Partnerships in Infrastructure in South Asia, 1990-2018
  • Figure 1.2 Sectoral Distribution of Public-Private Partnership Projects with Financial Closure in South Asia, by Country and Number of Cancellations, 1990-2018
  • Figure 1.3 Number of National Highway Public-Private Partnership Projects in India, by Year of Financial Closure, 2001-18
  • Figure 1.4 Traditional versus Public-Private Partnership Procurement of Infrastructure in India, 2001-17
  • Figure 1.5  Distribution of the Percentage of Contract Period Elapsed, 1990-2018
  • Figure 1.6 Distribution of Failures of Public-Private Partnerships over the Contract Period, 1990-2018
  • Figure 1.7 Estimates of Survival and Cumulative Hazard for Public-Private Partnership Projects
  • Figure 1.8 Factors That Predict the Likelihood of Public-Private Partnership Distress
  • Figure 1.9 Distribution of Predicted Probabilities of Distress for Public-Private Partnerships in South Asia, from 2020 to the End of Contractual Period
  • Figure 1.10 Composition of Public-Private Partnership Financing for Active Projects in South Asia, by Country, 1990-2018
  • Figure 1.11 Estimated Total Fiscal Costs from Early Termination of Public-Private Partnership Portfolio in South Asia, as a Percentage of GDP, 2020-24
  • Figure 1.12 Estimated Total Fiscal Costs from Early Termination of the Public-Private Partnership Portfolio in South Asia, as a Percentage of Government Revenues for a Single Year
  • Figure 1.13 Estimated Fiscal Costs from Early Termination of the Public-Private Partnership Portfolio in South Asia over Different Periods as a Percentage of Expected Government Revenues, 2020-24.
  • Figure 1.14 Estimated Fiscal Costs from Early Termination of the Public-Private Partnership Portfolio Assuming Profound Macrofinancial Shocks, as a Percentage of Government Revenues, 2020-24
  • Figure 1.15 Number of Indian Highway Projects Canceled versus Not Canceled, by Contract Type and Financial Closure Year, 2010-14
  • Figure 1E.1 Baseline Hazard Profile Estimates Using Semi-parametric Methods
  • Figure 1E.2 Baseline Hazard Profile Estimates Using Parametric Methods
  • Figure 1E.3 Baseline Hazard Profile Estimates Using Flexible Parametric Methods
  • Figure 2.1 South Asia: Share of State-Owned Commercial Bank Assets in Total Banking Assets, 2016
  • Figure 2.2 Bangladesh, India, and Pakistan: State-Owned Commercial Banks' Underperformance Relative to Domestic and Foreign Private Banks, 2009-18 Average
  • Figure 2.3 India: Branch Networks and Total Credit, 2018
  • Figure 2.4 India: Selected Funding and Credit Indicators, 2018
  • Figure 2.5 India: Selected Business Model, Performance, and Soundness Indicators, 2018
  • Figure 2.6 South Asia's Four Main Economies: Business Models and Strategies of State-Owned Commercial Banks versus Privately Owned Commercial Banks, 2009-18
  • Figure 2.7 India: Characteristics of the Average Client Firms of Scheduled Commercial Banks, 2009-18
  • Figure 2.8 India, Bangladesh, Pakistan, and Sri Lanka: Interest Coverage Ratio by Bank Type, 2009-18
  • Figure 2.9 Differences in How State-Owned Commercial Banks and Domestically Owned Private Banks Adjust in Times of Distress
  • Figure 2.10 Capital Injections by the Indian Government to Distressed State-Owned Commercial Banks, FY2009-FY2020
  • Figure 3.1 Total Number and Average Revenue of South Asian State-Owned Enterprises, 2017
  • Figure 3.2 State-Owned Enterprise Revenue by Sector in India, Pakistan, and Sri Lanka, 2016-17.
  • Figure 3.3 Net Profit/Loss of South Asian State-Owned Enterprises, 2014-17.

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