Annex XII to OIC/COMCEC-FC/33-17/REP
95
include the ratio of the net present value of debt relative to GDP and
government revenues, external debt servicing costs relative to exports or the
consolidated general government net lending relative to GDP. Best practices
include the OECD System of Composite Leading Indicators which is designed
to provide early signals of turning points in business cycles. OIC countries with
a high degree of integration into the global financial system might find the
signal approach methods (such as ifo Signal Approach) helpful, which assesses
the probability of a currency and banking crisis. Nations which have a high
natural disaster risk may consider negotiating standing backup credit lines for
immediate release of additional funding. Finally, the public budgets in many
OIC the member countries strongly depend on commodities which are prone to
global macroeconomic shocks. Especially the recent decline in oil prices has
led to a strong increase in newly issued public debt in some member countries.
Concerned countries should aim to diversify their economic activities into less
volatile sectors, which admittedly differ from case to case. Overall, synergies
from macroeconomic risk management may be achieved if the responsible
authorities built strong communication and coordination channels with the
DMU.
Instruments to Realize the Policy Advices:
COMCEC Financial Cooperation Working Group: In its subsequent
meetings, the Working Group may elaborate on the above-mentioned policy
areas in a more detailed manner.
COMCEC Project Funding: Under the COMCEC Project Funding, the
COMCEC Coordination Office issues calls for project proposals each year.
With the COMCEC Project Funding, the member countries participating in the
Working Groups can submit multilateral cooperation projects to be financed
through grants by the COMCEC Coordination Office. For realizing above-
mentioned policy recommendations, the member countries can utilize the
COMCEC Project Funding facility. These projects may include organization of
seminars, training programs, study visits, exchange of experts, workshops and
preparation of analytical studies, needs assessments and training
materials/documents, etc.
--------------------
---------