What Is the Group of 11 (G‑11)?
Overview
The Group of 11 (G‑11) is a coalition of lower‑middle‑income countries formed to coordinate advocacy and policy on debt relief, development financing, and market access. Launched on September 20, 2006 and promoted by King Abdullah II of Jordan, the G‑11 argues that high external debt and limited market access impede member countries’ ability to invest in economic development and poverty reduction. Members seek debt relief, concessional financing and improved access to advanced economies’ markets as complements to domestic reforms.
Membership and brief history
– Current members: Croatia, Ecuador, Georgia, Honduras, Indonesia, Jordan, Morocco, Pakistan, Paraguay, Sri Lanka, and El Salvador.
– Note: Tunisia was originally listed among the initial 11 but was replaced by El Salvador by 2007.
– Founding impetus: public appeals by Jordan’s King Abdullah II for a development partnership and targeted support for lower‑middle‑income countries (King Abdullah II, speeches accessed Aug. 30, 2021).
– Key public reference: Investopedia summary of the G‑11 (source below).
Why the G‑11 was created
– Heavy external debt burdens consume export earnings and fiscal revenues, limiting public investment in health, education and infrastructure.
– Trade barriers and tariffs in advanced economies reduce market access for export‑led growth strategies.
– Collective action aims to increase political leverage in negotiations with creditor countries, multilateral institutions and trade partners to obtain debt relief, concessional finance and better market access.
G‑11 objectives and priorities
– Advocate for debt relief, debt restructuring and debt‑for‑development conversions.
– Secure increased access to rich country markets, including lower tariffs and fewer non‑tariff barriers.
– Mobilize concessional assistance and technical support from multilateral institutions and donor countries.
– Coordinate member policies to promote sustainable growth and reduce vulnerability to external shocks.
Key challenges facing G‑11 members
– Heterogeneous membership: differing economic structures, fiscal positions and political priorities make coordinated policy more difficult.
– Dependence on commodity or low‑value exports that are vulnerable to price swings.
– Limited domestic revenue bases and weak public financial management in some members.
– Access to private capital at reasonable terms is constrained and conditional on reforms.
Practical steps — a roadmap for G‑11 members
Immediate (0–12 months)
1. Increase debt transparency
– Publish detailed, timely debt data (external and domestic; government, guaranteed and state‑owned enterprises). Use the IMF/World Bank Joint External Debt Hub format where possible.
2. Conduct a debt sustainability and vulnerability assessment
– Produce Debt Sustainability Analyses (DSAs) aligned with IMF/World Bank methodology; share results with creditors and partners to build trust for restructuring discussions.
3. Protect the poorest through targeted safety nets
– Reallocate or temporarily reprioritize spending to protect vulnerable groups while avoiding unsustainable blanket subsidies.
Short to medium term (1–3 years)
4. Pursue pragmatic debt workouts and creative instruments
– Seek Paris Club/official creditor negotiations, use collective action (CACs) on sovereign bonds, and consider debt‑for‑development swaps (e.g., debt for education/environment projects) or GDP‑linked instruments where appropriate.
5. Strengthen domestic revenue mobilization
– Expand tax base, improve VAT design and administration, modernize tax collection with digital tools, reduce evasion and improve property taxation where feasible.
6. Improve public financial management (PFM)
– Implement credible budgeting, medium‑term expenditure frameworks, debt management offices, and independent fiscal reporting/auditing.
7. Enhance export competitiveness and diversification
– Invest in trade facilitation (single customs windows, ports), reduce non‑tariff barriers domestically, support SMEs and value‑added processing, and negotiate better rules of origin in trade agreements.
Longer term (3–10 years)
8. Invest in human capital and infrastructure
– Prioritize education, health and connectivity (roads, electricity, broadband) to raise productivity and attract higher‑value FDI.
9. Create a stable investment environment
– Strengthen the rule of law, reduce corruption, ensure regulatory predictability, and adopt investment promotion frameworks and PPP best practices.
10. Build regional cooperation
– Pursue regional value chains, harmonize standards and coordinate macro‑policy to attract larger projects and markets.
Practical steps — what G‑11 members should ask of developed countries and multilateral institutions
For G‑7 and developed country governments
– Expand market access by lowering tariffs, easing rules of origin for preferential programs, and removing discriminatory non‑tariff barriers.
– Support targeted debt relief or restructuring programs for eligible members, especially where debt service crowds out social spending.
– Reallocate part of Special Drawing Rights (SDRs) to concessional windows for lower‑middle‑income countries.
For multilateral institutions (IMF, World Bank, regional development banks)
– Provide technical assistance for public financial management, tax administration and debt management.
– Offer concessional financing and blended finance for high‑impact public investments.
– Support coordinated debt restructuring frameworks and bridge financing during negotiation periods.
For private creditors and bondholders
– Engage in transparent, timely negotiations; consider collective action clauses and fair burden‑sharing arrangements.
– Explore new instruments (GDP‑linked bonds, staged repayments tied to key reforms) to align creditors’ returns with macroeconomic performance.
Practical steps — role of private sector and civil society
– Business community: collaborate with governments to identify bottlenecks to investment and trade; support workforce training and local value‑chain development.
– Civil society: monitor transparency and debt negotiations, advocate for social protection priorities and ensure community participation in major investment decisions.
How to sequence reforms and set measurable targets
– Use a three‑tier sequencing: stabilization (debt transparency, emergency spending), consolidation (revenue reforms, targeted austerity if needed, restructuring), and growth (investment, diversification).
– Suggested measurable indicators:
– Debt‑to‑GDP ratio and debt‑service‑to‑exports ratio.
– Tax‑to‑GDP ratio and share of non‑oil tax revenues (where relevant).
– Export diversification index and share of manufactured exports.
– Poverty and human development indicators (poverty rate, school enrollment, health coverage).
Monitoring, accountability and risk management
– Establish independent monitoring committees or use independent third‑party validators for restructuring deals.
– Publish periodic progress reports on agreed reforms and debt outcomes.
– Manage contingent liabilities from state‑owned enterprises and PPPs; when necessary, use clear legal frameworks and risk‑sharing provisions.
Potential risks and mitigation
– Social unrest from fiscal consolidation: mitigate with protective social spending and clear communication.
– Creditor holdouts and litigation risk after restructurings: reduce through broad creditor coordination and use of CACs.
– Policy slippage: maintain political consensus via cross‑party agreements and stakeholder engagement.
Conclusion
The G‑11’s central argument—that heavy debt and poor market access limit development—remains a practical policy challenge for many lower‑middle‑income countries. Progress requires a mix of credible domestic reforms (debt transparency, revenue mobilization, PFM, export diversification) and international responses (debt relief, concessional finance, market access and technical assistance). Coordinated, staged reforms combined with credible monitoring and international cooperation can help G‑11 members reduce debt burdens while preserving social investments and laying the foundation for sustainable growth.
Sources and further reading
– Investopedia. “Group of 11 (G‑11).” https://www.investopedia.com/terms/g/group-of-11-g11.asp
– Speeches and public statements by King Abdullah II of Jordan, “His Majesty King Abdullah II Opens the Group of 11/Lower‑Middle Income Countries Summit” and “King Urges New Development Partnership” (accessed Aug. 30, 2021).
If you’d like, I can:
– Draft a short policy memo tailored to one specific G‑11 member (e.g., Pakistan or Jordan) with prioritized actions and a 3‑year timeline.
– Create a checklist for debt‑transparency publication and the data fields to include.