“Lights and Shadows an analysis of the debt swap for education.”
According to this report, in order for these debt swaps to become effective in the fight against poverty, the released resources must be dedicated to basic social services and must favour the most vulnerable populations. The debt swap transactions which have been agreed in the last month present positive aspects but also important shadows. The positive side includes the tax release. It implies for the treasury of the beneficiary countries in those cases to offer discount rates. However the main shadows are the very scarce amounts that have been swapped, the insufficient tax benefits and the limited participation of relevant bodies together with the limited transparency of the whole process. The study insists that although the debt swaps could become positive tools, it must not be conceived as the solution to the debt and education problems. It is rather a complementary tool to the wider and necessary process to tackle the total debt problems and the design of the long term development policies.