2019 July 12 Friday

Debt Sustainability and Macroeconomic Issues in Infrastructure (Open Event)

Salle D, ECCL


Increasing investment in infrastructure is an urgent priority for many developing economies, including those in Asia, as it is crucial for meeting the Sustainable Development Goals and advancing their economic development. Many developing countries should be investing around 8 percent of GDP in infrastructure in order to help them catch up with developed economies but many Asian countries’ spending falls short of this. While there are exciting investment opportunities available, however, these countries face many short-term challenges, not least the rapid accumulation of debt.


Public and corporate debt in emerging economies has risen to near-record highs in recent years, approaching levels not seen since the debt crisis of the 1980s. In 2018, 40 percent of low-income developing countries were at high-risk of or were already experiencing debt distress. In a period of decreasing global liquidity, a slowdown in global growth and rising geopolitical and trade tensions, there are growing concerns about how best to ensure debt sustainability in developing countries’ and emerging markets.


These concerns are reflected in the Principles for Debt Transparency, endorsed in June of 2019 by Finance Ministers from the G20 economies, which called for responsible, transparent and sustainable private-sector lending. These Principles will complement similar efforts to improve transparency in public-sector lending. The Principles recognize that debt sustainability is a shared responsibility and one that the international community must address together.


Debt sustainability is an issue of great importance for the Asian Infrastructure Investment Bank (AIIB). AIIB is committed to working with partner institutions to ensure that its own operations follow the highest standards of sustainable lending, including drawing on the International Monetary Fund’s comprehensive Debt Sustainability Analysis Framework.


This seminar aims to explore the fundamental question of how developing countries can increase investment in the infrastructure their economies need, while at the same time navigating uncertainties in the global economy and avoiding the accumulation of unserviceable, unsustainable debt that will drain their economies rather than boost them. 


Discussion Topics

  • Do developing economies today have sufficiently good macroeconomic frameworks and policy buffers to support increase in infrastructure investments?
  • Are debt and debt levels in developing economies well managed? Have the learning points from past crises been sufficiently incorporated into policies? 
  • What are the further risks to debt sustainability and how should countries respond? Are there hidden vulnerabilities?
  • What further improvements can international organizations and countries make in terms of debt sustainability analysis?
  • In today’s context, should countries scale back infrastructure investments in midst of economic downturn and uncertainties, or can such investment act as a counter-cyclical measure?


Session Format

  • Keynote speech

  • Presentation of macro and debts statistics in Asia by Dr Jang Ping Thia, Principal Economist and Manager (Economics), AIIB

  • Panel Discussion




Zeti Akhtar Aziz

Former Governor of Bank Negara Malaysia, Malaysia’s Central Bank, AIIB International Advisory Panel member


Dr. Zeti served as Governor of Bank Negara Malaysia from May 2000 to April 2016. She had an important role in managing the resolution of the financial system in 1998 during the Asian financial crisis and the consequent strong recovery of the Malaysian economy.
In Asia, Dr. Zeti was active in strengthening cooperation and regional financial integration. In 2006, she chaired the regional task force that prepared the report for the future direction of central bank financial cooperation in the East Asian region. At the BIS, she was the chair of the BIS Central Bank Governance Group. In the region she was a founding member of the Bank for International Settlements (BIS) Asian Consultative Council, and was the first Co-chair of the Financial Stability Board Regional Consultative Council Group for Asia.
She is currently Co-chair, Board of Governors of Asia School of Business, established in collaboration with MIT Sloan. In May 2018, following the change in the Government of Malaysia, Dr. Zeti was appointed as a member of the Eminent Council to advise the Government on the Institutional and Structural Reforms required for the country. In July 2018, she was appointed as group chairman of Perbadanan Nasional Berhad (PNB).


Dr. Zeti received her PhD in Economics from the University of Pennsylvania.

Bambang Permadi Brodjonegoro

Minister, Ministry of National Development Planning, Indonesia


Bambang P.S. Brodjonegoro is currently the Minister of National Development Planning/Head of National Development Planning Agency (Bappenas), appointed by President Joko Widodo on 27 July 2016. He was previously the Minister of Finance (from 27 October 2014 to 27 July 2016) in President Widodo’s Working Cabinet. During President Susilo Bambang Yudhoyono’s administration, Bambang served as the Deputy Minister of Finance (from 3 October 2013 to 20 October 2014).


Bambang is one of Indonesia’s leading economists, with a Bachelors Degree in Economic Development and Regional Economy from the University of Indonesia (1990), and a Masters Degree (1995) and Ph.D. (1997) in Urban and Regional Planning from the University of Illinois at Urbana Champign, USA. His areas of expertise include regional economics, fiscal decentralisation, public finance, development economics, urban economics, and transportation.


He is active on a number of international boards including the ASEAN Infrastructure Fund and the ASEAN+3 Finance and Central Bank Deputies Meeting.


He is a committed and active academic, currently a Professor of Economics at the University of Indonesia. Prior experience has included positions as guest lecturer in the Department of Urban and Regional Planning with the University of Illinois; Director General of the Islamic Research and Training Institute at the Islamic Development Bank; and Dean of the Faculty of Economics with the University of Indonesia.

Philip Hammond

Chancellor of the Exchequer, HM Treasury


The Rt Hon Philip Hammond MP was appointed Chancellor of the Exchequer on 13 July 2016. Philip was born in Epping, Essex and attended school in Brentwood before studying politics, philosophy and economics at University College, Oxford.


He was elected Conservative MP for Runneymede and Weybridge to Parliament in 1997, and held a number of shadow portfolios. In May 2010, he became Secretary of State for Transport, when he was appointed as a Privy Counsellor. Following this, he was Secretary of State for Defence from 2011 until July 2014. Philip served as Foreign Secretary from July 2014 until July 2016.


Philip had a business career in small and medium-sized companies in manufacturing, consultancy, property and construction, and oil and gas, both in the UK and abroad. He is married with 3 children and lives in Send, Surrey.

Takatoshi Kato

Senior Adviser, Japan Center for International Finance


Mr. Takatoshi Kato assumed office as Deputy Managing Director of the International Monetary Fund on February 2, 2004.


Born in 1941, Mr. Kato has a B.A. from Tokyo University (1964) and M.P.A. from Princeton University (1968). Prior to taking up his current position, he was Advisor to the President, Tokyo-Mitsubishi Bank and a Visiting Professor at Waseda University. He was also a Visiting Professor at Princeton University (1998-99).
Mr. Kato has held a series of senior positions at the Ministry of Finance of Japan. These include Vice-Minister of Finance for International Affairs (1995-97) and Director-General of the International Finance Bureau (1993-95). From 1985-87, Mr. Kato served as Executive Director for Japan at the Asian Development Bank (ADB). Previously, he held positions at the Ministry of Finance and the OECD Secretariat. Mr. Kato has served as a member of various advisory panels including the World Health Organization's (WHO) Commission on Macroeconomics and Health (2001) and an ADB panel on poverty reduction in Asia and the Pacific (1999-2000). In 2002, he published a book on exchange rate policy.

Martin Kimmig

Chief Risk Officer, Risk Management Department, AIIB


Dr. Martin Kimmig heads AIIB’s risk management. His main responsibilities are to ensure the stability and financial continuity of the Bank. He oversees capital allocation and utilization, manages financial and non-financial risks, including reputational consequences, as well as fosters a strong risk culture throughout the Bank. He joined the AIIB from The Rock Creek Group where he held the position of a Managing Director covering emerging market equities. Previously, he spent a 24-year career at the World Bank Group, primarily in the International Finance Corporation (IFC) where he held leadership positions in both investment operations and risk management. Martin Kimmig holds a PhD in economics from the University of Freiburg and a CFA designation. He is a national of Germany.

Wencai Zhang

Director General, Ministry of Finance


Dr. Zhang Wencai has been a member of the AIIB Board of Directors since February 2019. Dr. Zhang has significant experience in the public sector, including with international financial institutions and the Ministry of Finance of China. He currently holds the position of Director General of the Department of International Economic and Financial Cooperation at China’s Ministry of Finance and also represents China as Alternate Governor at the International Fund for Agricultural Development (“IFAD”) and as Director at the NDB. Dr. Zhang previously served at the Ministry of Finance of China in various senior capacities since 1989, including as the Director General of the Department of External Economic Cooperation from 2012 to 2013, and as the Deputy Director General for the International Department from 2004 to 2012, where he worked on various multilateral initiatives, including the G-20, the ASEAN+3, and the Asia Pacific Economic Cooperation. In the field of international financial institutions, Dr. Zhang served as Vice President of the ADB from 2013 to 2018 and as Director for China at the ADB from 2007 to 2009. From 1993 to 1996, he was Advisor to the Executive Director for China at the World Bank.



Roman Kräussl

Professor, Luxembourg School of Finance


Roman Kräussl is Professor at the Luxembourg School of Finance and  Visiting Fellow at the Hoover Institution at Stanford University. He studied Economics at the University of Bielefeld and got his PhD in Financial Economics at the Center for Financial Studies (CFS) at Goethe University, Frankfurt/Main. Dr. Kräussl also holds a position as Visiting Professor at Goizueta Business School, Emory University, Atlanta, and is Fellow at the CFS and Research Fellow at the Emory Center for Alternative Investments. His research focuses on Alternative Investments, including Private Equity and Infrastructure. Dr. Kräussl has published extensively in leading economic journals such as The Review of Financial Studies and his work has been cited in The Economist, FT, WSJ, NYT, Forbes, among others.