Two advisory missions by a senior international debt expert have been undertaken since 2002.

The target audience for the introductory seminars has been the managers and senior external debt compilers in the countries subscribing to the Special Data Dissemination Standard.

They provide the debtor with access to working capital needed to carry out its operations, while granting seniority status to new debt.

But a sovereign default would require a much larger bankbailout than in Greece, potentially leaving private debt almostworthless if official debt has seniority. Total haircuts don’thappen historically – except in the wake of communist takeovers –but it is hard to imagine that private creditors won’t sufferhuge losses in net present value.

In a policy brief issued in 2002, the African Forum and Network on Debt and Development (AFRODAD) stated that illegitimate debts included debts contracted by dictatorships or repressive regimes and used to strengthen the hold of those regimes; debts contracted by corrupt Governments, which were stolen by senior public officials; debts used for improperly designed projects and programmes; debts that swelled as a result of high interest rates and other conditions imposed by lenders; and debts which could not be serviced without impoverishing a country's people.

The emphasis on burden-sharing and comparable treatment between private and official creditors constitutes a major advance over the debt strategies adopted during the 1980s as well as the more recent emerging-market crises when official intervention in debt crises was designed primarily to keep sovereign debtors current on debt servicing to private creditors, and when the seniority accorded to multilateral debt went unchallenged. However, it should be added that the emphasis on burden-sharing among creditors should not overshadow the more important question of equitable treatment of debtors and creditors.