የመጨረሻው የዳኛው የፍርድ ውሳኔ ደብረ ጽዮን ቅድስት ማርያም ቤተ ክርስቲያን

ለርዕሰ አድባራት ለንደን ደብረ ጽዮን ቅድስት ማርያም ቤተ ክርስቲያን አባላት፤ እንዲሁም በUK እና በመላው ዓለም ለምትገኙ የኢትዮጵያ ኦርቶዶክስ ተወሕዶ ሃይማኖት ተከታዮች በሙሉ። በመጀመሪያ በቸሩ ፈጣሪአችን ሥም የከበረ ሰላምታችን ይድረሳችሁ።

በስደት ሀገር ከተመሠረተች 40 ዓመታትን ያስቆጠረቸው ርዕሰ አድባራት ለንደን ደብረ ጽዮን ቅድስት ማርያም ቤተ ክርስቲያን ለአያሌ ዓመታት የምእመኗ ሰላምና አንድነት ተጠብቆ በመቆየት ለከፍተኛ የዕድገት ደረጃ ከደረሰች በኋላ እነሆ ባለፉት ሁለት ዓመታት ግን ሰላሟ ተናግቶ የቤተ ክርስቲያኗ በጎ ገጽታና መልካም ምሳሌነቷ ይልቅ በስሟ የሚፈጸመው ክፉውና አሳዛኙ ተግባር ጎልቶ እየተስተጋባ ብዙ ክርስቲያኖችን ሲያሳዝንና ግራ ሲያጋባ ቆይቷል።

ለክርስቲያኑ ሕዝብ ግራ መጋባት ዋነኛው ምክንያትም እግዚአብሔር ሳይፈራና ሳይከበር በመመለኪያ ቤቱና ለአዳም ዘር ድህነት ሲል በተሰቀለበት መስቀሉ ስም ሃሰት እውነት መስሎ እየተነገረ፤ የአስተዳደር ጉዳይን ከሃይማኖት ሕግጋት ጋር አደባልቆ አግዝፎና አጣሞ በማቅረብ ሕዝበ ክርስቲያኑ ተወናብዶ ወዳጅና ጠላቱንም ሆነ ክፉና ደጉን መለየት ተስኖት የሰዎች ድብቅ ዓላማ መሣሪያ አድርጎ ለማስቀረት የሚደረገው ያላሰለሰ ጥረት ነው።

በርዕሰ አድባራት ለንደን ደብረ ጽዮን ቅድስት ማርያም ቤተ ክርስቲያን ውስጥ የተፈጠረው ችግር መንስኤ ሃስትና ተንኮል ካልተቀላቀሉበት እውነታው አጭርና ግልጽ ነው።

በእንግሊዝ ሀገር ስደት ላይ የሚገኙ የኢትዮጵያ ኦርቶዶክስ ተወሕዶ ሃይማኖት ተከታይ ኢትዮጵያኖች ሰላም፣ ፍቅርና አንድነትን ፈጥረው፤ የሚተዳደሩበትና የሚመሩበት ወጥ የመተዳደሪያ ሕግ ቀርፀው ቤተ ክርስቲያኗን ላለፉት 40 ዓመታት ሃብትና ጉልበታቸውን በመለገስ በእግዚአብሔር ተራዳዒነት በተከታዮች ብዛትም ሆነ በሃብትና ንብረት ተደራጅታ በባዕድ ሃገር ለብዙ ትውልድ የሚተላለፍ ቅርስ ባለቤት ሆና እንድትቆይ አደረጉ። የቤተ ክርስቲያኗ በሃብት መደርጀትም ሆነ በአገልግሎት መስፋት እያደገ መምጣት አንጻር ሲሰራበት የነበረው የውስጥ መተዳደሪያ ደንብና ትረስት ዲድ መሟላት የሚገባቸውን አንቀጾች ስለማያካትት መሻሻሉ ስለታመነበት የደንብ ማሻሻያ ኮሚቴ በአባላት ተመርጦ በመሰየም ማሻሻያውን አርቅቆ እንዲያቀርብ መደረጉ የሚታወስ ነው።

የቀረበው ማሻሻያ ረቂቅም ለሕዝብ ውይይት ቀርቦ እንደ አስፈላጊነቱ መሻሻልና መስተካከል ተደርጎበት እንዲፀድቅ ተወስኖ ውይይቱ ተጀምሮ ሳለ ሕዝብ መርጦ የሾማቸው አስተዳዳሪ አባ ግርማ ከበደና በሰበካ አስተዳደር ጉባኤ አባልነት ሕዝብ መርጦ ከሰየማቸው ውስጥ በተለይ ሦስት ካህናት ከአባ ግርማ ከበደ ጋር በመሆን በቀጥታና በተዘዋዋሪ ሕዝቡ በማሻሻያ ደንቡ ላይ ውይይት እንዳያካሂድ መብቱን ከመገደብ አልፈው ሙሉ በሙሉ ነፈጉት።

የኢትዮጵያ ኦርቶዶክስ ተወሕዶ ቤተ ክርስቲያን የሰበካ መንፈሳዊ ጉባኤ መተዳደሪያ ደንብ በሆነው በቃለ ዓዋዲውና ቤተ ክርስቲያኗ በእንግሊዝ ሀገር በተመዘገበችበት የቻሪቲ ሕግም (ትረስት ዲድ) ሆነ በውስጥ መተዳደሪያ ደንቡ ላይ የተደነገገውን የአባላት መብት የጣሱት እነዚህ ካህናት ይህ የአባላትን መብት መጣስ ሕገ ወጥ ተግባር ይሸፈንላቸው ዘንድ እውነታውን ወደጎን በመጣል ጉዳዩን የሃይማኖት ሕግ መጣስ አድርገው የሃሰት መረጃ በማቅረብ በሕዝቡ መካከል መከፋፈልና ጥላቻ እንዲስፋፋ አደረጉ።

ምእመናኑን ወክለው የተመረጡ 4 ምእመናን የሰበካ አስተዳደር ጉባኤ አባላት በገዛ ፍቃዳቸው ከሥልጣናቸው በመልቀቅ ስራ ሲያቆሙ አስተዳዳሪውን ጨምሮ የቀሩት፤ ሦስቱ ካህናት 1 የሰንበት ት/ ቤት ወጣቶች ተወካይ ጋር 4 በመሆን የአገልግሎት ዘመናቸው እንዳለቀና ከዛም በላይ ደግሞ ኮረም የማይሞሉ መሆናቸው በግልጽ እየታወቀ ፍጹም አንባ ገነናዊ ባህሪን በመላበስ በኢትዮጵያ ኦርቶዶክስ የተዋሕዶ ቤተ ክርስቲያን ታይቶም ተሰምቶም በማያውቅ ሁኔታ የቤተ ክርስቲያኑ አባላት የሚያነሱትን የመብት ጥያቄ ያስተባብራሉ ብለው ያመኑባቸውን ከ16 በላይ ምእመናንንና ዲያቆን የቤተ ክርስቲያን አባልነታቸውን በመሰረዝ ቤተ ክርስቲያን ቅጥር ግቢ ውስጥ እንዳይደርሱ በደብዳቤ አገዱ።

ይህ ክርስቲያናዊ ያልሆነ አንባገነናዊ ተግባራቸው ህዝበ ክርስቲያኑን በከፍተኛ ደረጃ በማስቆጣቱ በቤተ ክርስቲያን ውስጥ ከፍተኛ ረብሻ ተነስቶ ቤተ ርክስቲያኗ አገልግሎቷን አቋርጣ ልትዘጋ ቻለች።

ቤተ ክርስቲያኗ ተዘግታ የቤተ ክርስቲያኗ አባላት ውጭ በተበተኑበትም ወቅት እነዚህ ሕዝብ መርጦ የሾማቸውና የወከላቸው መሆኑን በመርሳት አንባ ገነንነት የተጠናወታቸው የቤተ ክርስቲያኗ አስተዳዳሪና 3 የሰበካው አስተዳደር ጉባኤ አባላት የቤተ ክርስቲያኗ አባላት ሳይፈቅዱና ሳያውቁ ቤተ ክርስቲያኗ አባል ሆና ለማታውቅበት ካሁን ጀምሮ በሀገረ ስብከት ስር ሆናለች በማለት ይህንኑ ውል በመፈራረም በአዋጅ አስነገሩ።

በዚህ ሕገ ወጥና ክርስቲያናዊ ያልሆነ እርምጃቸው የቤተ ክርስቲያኗን አባላት ለዓመታት ከቆረቡበት፤ ወግ ማዕረግ ካዩበትና ለዓመታት ከአገለገሉበትና ከተገለገሉበት ቤተ ክርስቲያናቸው ለማባረር በመሞከር ቤተ ክርስቲያኗን ከነሃብትና ንብረቷ በቁጥጥራቸው ሥር ያዋሉ ስለመሰላቸው የቻሪቲ ኮሚሽን ከተቀሩት የቤተክርስቲያን አባላት ጋር በመነጋገር፤ በመደራደርና በመፈራረም ፈጽሙ በማለት Action plan ነድፎ የሰጣቸውን ወደ ጎን በመጣል በራሳቸው ፍቃድ፤ ለራሳቸው ዓላማና ተግባር በሚያመቻቸው ሁኔታ የቤተ ክርስቲያኗን አባላት ወደ ጎን በመተው የሌሎች አብያተ ክርስቲያን አባላት በመሰብሰብ ቤተ ክርስቲያንን መልሰው በመክፈት የቤተ ክርስቲያኗ አባላት ውጪ በመቅረት፤ ብርድ፣ ዝናብና በረዶ እየተፈራረቀባቸው በገዛ ቤተ ክርስቲያናቸው የበይ ተመልካች በመሆን እንዲጸልዩ አደረጓቸው።

በዚህም አላበቁም በግቢው ውስጥ ድንኳን እየጣሉ ጸሎት የሚያካሂዱ የቤተ ክርስቲያኗ ዋልታና ማገር የሆኑ ምእመናን ከግቢው ውስጥ ለማባረር የተለያዩ ሙከራዎችን በማድረግ ያላሰለሰ ጥረት አደረጉ ነገር ግን አንዱም ላይሳካላቸው ችሏል። ቤተ ክርስቲያናቸው ተነጥቆ እውጪ ለመጸለይ የተገደዱት የቤተ ክርስቲያኗ አባላት ለሕገ ወጥ ተግባርን ሕገ ወጥ ምላሽ መሥጠትን ሳይሆን ሕገ ወጥ ድርጊትን በሕጋዊ አካሄድ ሕግ ፊት አቅርቦ ፍትሕን ማግኘት የሚለውን መርህ በመከተል፤ በታላቅ ትዕግሥት ጽናትና ጥንካሬ በፈጣሪ ተራዳኢነት ፍትሕን ለማግኘት በጠቅላላው ለ2 ዓመታት የተቃረበ ጊዜ መራራ ትግል በማድረግ አስፈላጊውን የሕግ አካሄድ መመሪያና ደንብ አሟልተው በማቅረብ የቤተ ክርስቲያኗ ሕጋዊ ባለቤትነት ጥያቄና የውስጥ መተዳደሪያ ደንብ ሕጋዊ ሰነድነት ጉዳይ ፍርድ ቤት ቀርቦ ይወሰንበት ዘንድ የቻሪቲ ኮሚሽን ሙሉ ፍቃድና ይሁንታ እንዲያገኝ አስደረጉ።

በዚህ መሠረት ሰኞ 09/02/2915 የተጀመረው የፍርድ ቤት ችሎት ማክሰኞና ረቡዕ ሙሉ ቀናት ቀጥሎ ከቆየ በኋላ ሐሙስ ታርፎ ዓርብ የመጨረሻው የዳኛው የፍርድ ውሳኔም ተበየነ።

የዳኛው የፍርድ ውሳኔ

የመጨረሻው የዳኛው የፍርድ ውሳኔም በጥቅሉ እንደሚከተለው ነው።

1.       የቤተ ክርስቲያኗ አባላት ለዓመታት ቤተ ክርስቲያኗን (ቻሪቲውን) በገንዘባቸውና በጉልበታቸው የረዱና ሲያገለግሉም ሆነ ሲገለገሉ የኖሩ ስለሆነ በቤተ ክርስቲያኗ ጉዳይ ያገባቸዋል፤

2.     የቤተ ክርስቲያኗ አባላት የቤተ ክርስቲያኗን ጉዳይ ፍርድ ቤት ለማቅረብ የሚያስችል አግባብ አላቸው፤ ይህንንም ለማድረግ ከቻሪቲ ኮሚሽንም ሙሉ ፍቃድ አግኝተዋል አስፈላጊውን ፎርማሊቲ ሁሉ አሟልተው አቅርበዋል፤

3.     የቤተ ክርስቲያኗ አባላት በመረጡት ካህን አማካኝነት የቤተ ክርስቲያንን አገልግሎት የማግኘት መብት አላቸው፤

4.     የቤተ ክርስቲያኗ አባላት ያለምንም ገደብና መሰናክል ቤተ ክርስቲያን ውስጥ በተራ በመግባት የቤተ ክርስቲያን አገልግሎት እንዲያከናውኑ ፍርድ ቤቱ የፍርድ ማዘዣ (Interim relief Order) አውጥቷል፤

5.     ይህ የፍርድ ቤቱ ውሳኔም በፍርድ ቤቱ ማዘዣ ላይ በወጣው ዝርዝር ቀንና አፈጻጸም መሠረት ተፈጻሚነት ይኖረዋል፤

6.    ይህ የፍርድ ቤት ማዝዣ ተግባራዊ እንዳይሆን በሚሞክርና በሚያሰናክል ላይ ፍርድ ቤቱ ጥብቅ እርምጃ ይወስዳል የሚል ነው።

ከላይ በጥቅሉ የተሰጠው የፍርድ ቤት ብይን ከተላለፈ በኋላ ሥልጣን አንለቅም ብለው የሚንገታገቱት ካህናት ጠበቃ በፍርዱ ላይ ይግባኝ ጠይቆ ዳኛው የይግባኙን መሠረት ለዳኛው እንዲያቀርብ መመሪያ ሰጠው።

በመመሪያውም መሠረት ጠበቃው ከ1 ሰዓት በላይ ጊዜ የወሰደ የተንዛዛ የይግባኝ ጥያቄዎቼ መሠረቶች ናቸው ያላቸውን ነጥቦች አቅርበ። ዳኛውም በሚገባ ካዳመጠ በኋላ በመጨረሻ ዳኛው ይግባኙን ውድቅ (reject) እንዳደረገው በመግለጽ ፍርዱ ተጠናቋል። ከፍርዱ (Judgement) መጠናቀቅ በኋላ የፍርድ ቤቱን ማዘዣ አፈጻጸም በተመለከተ ዳኛው ለሁለቱ ጠበቆች ዝርዝር መመሪያ ሰጥቶ ችሎቱን ዘግቷል።

በዚህ የፍርድ ውሳኔ መሠረት የቤተ ክርስቲያኗ አባላት በጉዳዩ በመርታት መብታቸውን የሚያስከብር የፍርድ ቤት ትዕዛዝ (Interim relief Order) ማግኘት የቻሉ ሲሆን፤ ሌላው ወገን ግን በይግባኙ ከቀጠለበት ይግባኝ ለማለት ይፈቀድለት ዘንድ ለይግባኝ መሥሪያ ቤት (Appeal Court) ማመልከት ይኖርበታል።

ወድ የርዕሰ አድባራት ለንደን ደብረ ጽዮን ቅድስት ማርያም ቤተ ክርስቲያን አባላትና መላው የኢትዮጵያ ኦርቶዶክስ ተዋሕዶ ሃይማኖት እምነት ተከታዮች።

እኛ ለቤተ ክርስቲያናችን፣ ለመብታችን እና ለእውነት የቆምን የቤተ ክርስቲያኗ አባላት ችግራችንና ክሳችን የቤተ ክርስቲያኗ እንዲያስተዳድሩንና እንዲመሩን ራሳችን መርጠን የሰየምናቸው ጥቂት ካህናት በወያኔ አገዛዝ ሹመኞችና ካድሬዎች እየታገዙ አሥር፣ ሃያ፣ ሰላሣ ዓመትና ከዛም በላይ የኖርንባት፤ ከልጅነት እስከ ጎልማሳነትና እስከ አዛውንትነት ያገለገልንባትም ሆነ የተገለገልንባትና ሃብትና ጉልበታችንን አፍስሰን በእግዚአብሔር ተራዳኢነት ካደራጀናት ቤተ ክርስቲያናችን መብታችንን ገፈው ሊያባርሩን የሚሞክሩትን እንጂ የትኛውንም ወገን ደግፈው ከቆሙ እንደኛው ካሉት ወንድሞቻችን፣ እህቶቻችን፣ አባትና እናቶቻችን ጋር አንዳችም ችግር የለብንም ሊኖርብንም አይገባም። ከፍርዱም በሁዋላ በሚወጡ መግለጯዎች ላይ፤ ክሱ የተመሰረተው በዘር ላይ ተመርኩዞ ነው፤ አመልካቾቹም ሆነ ተከታዮቻቸው ዘረኞች ናቸው፤ የሚል የሀሰት ፕሮፖጋንዳ እየተነዛ ነው። ይህ ግን ሆን ተበሎ በክርስቲያኖች መካከል ከፍተኛ ክፍፍልን በመፍጠር ድጋፍ ለማግኘት የሚደረግ ጥረት ነው። መሰረት የሌለው ውሸት ነው። ስልጣን የጠማው ወይም መልቀቅ የማይፈልግ መሪ የሚጠቀምበት የከፋፍለህ ግዛው የአመራር/የማወናበድ ስልት ነው። ይህ ደግም ምን ያህል ጥፋት እንዳመጣና እንደሚያመጣ ታሪክ ምስክር ነውና ይህንን ትልቅ ውሸታቸውን ማጋለጥና መቃዎም የሁሉም ክርስቲያን ሃላፊነት ነው።

በዚህ መሠረትም ከአሁን በፊት በጉዳዩ አፍላነትም ሆነ ትዕግሥትን በማጣትና በግልፍተኝነት ተፈጥረው የነበሩ የግለሰቦች ጊዚያዊ መቃቃሮች ሁሉ ወደ ጎን ተትተው እመካከላችን ሆነው እኛን በመከፋፈል ሊጠቀሙብን ከሚሹት የቀበሮ ባህታውያን በስተቀር ሌሎቻችን አንድነታችንን መልሰን በመጠንከር በአንድ ጣራ ስር በመሆን እግዚአብሔርን ለማምለክና ስሙን ለማመስገን የሚከለክለን አንዳችም ነገር ሊኖር እንደማይችል ያለንን የጸና እምነት ለመግለጽ እንወዳለን። የእግዚአብሔር ተራዳዒነት ከሁላችንም ጋር ይሁን!!! አሜን!!! ርዕሰ አድባራት ለንደን ደብረ ጽዮን ቤተ ክርስቲያንን እናድን ማህበር።

የእግዚአብሔር ተራዳዒነት ከሁላችንም ጋር ይሁን!!!

አሜን!!!

ርዕሰ አድባራት ለንደን ደብረ ጽዮን ቤተ ክርስቲያንን እናድን ማህበር።

E-mail: ourchurchdebretsion@gmail.com

Ethiopia issues unfamiliar investor warning over war and famine

Ethiopia issues unfamiliar investor

warning over war and famine

Every country tapping the global sovereign bond market details the dangers investors face in its prospectus, often in a boilerplate section enumerating possible problems – such as fiscal deficits or taxation issues – that is largely ignored.

But the document sent by Ethiopia to international investors ahead of its foray into the global sovereign bond market is somewhat different. Far from a boilerplate, it includes a list of unfamiliar hazards, such as famine, political tension and war.

The document, seen by the Financial Times, is a sobering reminder of the risk of investing in one of Africa’s less developed nations. With gross domestic product per capita at less than $550 per year, Ethiopia is the poorest country yet to issue global bonds.

In the 108-page prospectus, issued ahead of its expected $1bn bond, Ethiopia tells investors they need to consider the potential resumption of the Eritrea-Ethiopia war, which ended in 2000, although it “does not anticipate future conflict”.

There is also the risk of famine, the “high level of poverty” and strained public finances, as well as the possible, if unlikely, blocking of the country’s only access to the sea through neighbouring Djibouti should relations between the two countries sour.

Addis Ababa, Ethiopia’s capital, also warns that it is ranked close to the bottom of the UN Human Development Index – 173rd out of 187 nations – and cautions about the possibility of political turmoil. “The next general election is due to take place in May 2015 and while the government expects these elections to be peaceful, there is a risk that political tension and unrest . . . may occur.”

But the long list of risks is not deterring investors, as ultra-low interest rates in the US, the UK, eurozone and Japan push sovereign wealth funds and pension funds into riskier countries in search of higher-yielding bonds.

Instead, some investors are focusing on the danger of a currency crisis. Addis Ababa has devalued its currency, the birr, twice over the past five years – by 23.7 per cent in 2010 and 16.5 per cent in 2011 – in an effort to win export competitiveness. Since then, the Ethiopian central bank has managed to slow the currency’s depreciation by intervening regularly in the market.

Addis Ababa has now told potential investors that “it may not be possible for the National Bank of Ethiopia to manage the exchange rate as effectively in the future as it has in the past” because of reduced hard currency reserves.

The country has reserves to cover only 2.2 months’ worth of imports – almost half the 4.3 months it had in 2010-11. “Failure to manage a steadily depreciating exchange rate may adversely affect Ethiopia’s economy . . . [and its] ability to perform obligations under” the bonds, it says.

The prospectus also reveals for the first time details of Ethiopia’s heavy dependence on Chinese loans to finance its infrastructure investment. Credit lines from China and Chinese entities accounted for 42 per cent of all external loan disbursements in 2013-14, and for 69 per cent in 2012-13.

“China has emerged as a key development partner,” the prospectus says, “often providing sizeable financing tied to infrastructure projects undertaken by Chinese firms.” Among those, telecoms groups ZTE and Huawei and a company the prospectus names as China Electric Power have lent Ethiopia more than $2bn over the past few years.

Lazard, the investment bank advising Addis Ababa on financial matters, declined to comment. The Ethiopian government did not respond to a request for comment. Investors said the bond was expected to price later this week at between 6 and 7 per cent.

How Countries Deal With Debt

(I) INVESTOPEDIA

By Brent Radcliffe

  

You've heard it before: someone runs into credit card or mortgage payment problems and needs to work out a payment plan to avoid going bankrupt. What does an entire country do when it runs into a similar debt problem? For a number of emerging economies issuing sovereign debt is the only way to raise funds, but things can go sour quickly. How do countries deal with their debt while striving to grow?

Most countries – from those developing their economies to the world's richest nations – issue debt in order to finance their growth. This is similar to how a business will take out a loan to finance a new project, or how a family might take out a loan to buy a home. The big difference is size; sovereign debt loans will likely cover billions of dollars while personal or business loans can at time be fairly small.

Sovereign Debt

Sovereign debt is a promise by a government to pay those who lend it money. It is the value of bonds issued by that country's government. The big difference between government debt and sovereign debt is that government debt is issued in the domestic currency, while sovereign debt is issued in a foreign currency. The loan is guaranteed by the country of issue.

Before buying a government's sovereign debt, investors determine the risk of the investment. The debt of some countries, such as the United States, is generally considered risk free, while the debt of emerging or developing countries carries greater risk. Investors have to consider the government's stability, how the government plans to repay the debt, and the possibility of the country going into default. In some ways, this risk analysis is similar to that performed with corporate debt, though with sovereign debt investors can sometimes be left significantly more exposed. Because the economic and political risks for sovereign debt outweigh debt from developed countries, the debt is often be given a rating below the safe AAA and AA status, and may be considered below investment grade.

Debt Issued in Foreign Currencies

Investors prefer investments in currencies they know and trust, such as the U.S. dollar and pound sterling. This is why the governments of developed economies are able to issue bonds denominated in their own currencies. The currencies of developing countries tend to have a shorter track record and might not be as stable, meaning that there will be far less demand for debt denominated in their currencies.

Risk and Reputation

Developing countries can be at a disadvantage when it comes to borrowing funds. Like investors with poor credit, developing countries must pay higher interest rates and issue debt in foreign stronger currencies to offset the additional risk assumed by the investor. Most countries, however, don't run into repayment problems. Problems can arise when inexperienced governments overvalue the projects to be funded by the debt, overestimate the revenue that will be generated by economic growth, structure their debt in such a way as to make payment only feasible in the best of economic circumstances, or if exchange rates make payment in the denominated currency too difficult.

What makes a country issuing sovereign debt want to pay back its loans in the first place? After all, if it can get investors to pour money into its economy, aren't they taking on the risk? Emerging economies want to repay the debt because it creates a solid reputation that investors can use when evaluating future investment opportunities. Just as teenagers have to build solid credit in order to establish creditworthiness, countries issuing sovereign debt want to repay their debt so that investors can see that they are able to pay off any subsequent loans.

The Impact of Defaulting

Defaulting on sovereign debt can be more complicated than defaults on corporate debt because domestic assets cannot be seized to pay back funds. Rather, the terms of the debt will renegotiated, often leaving the lender in an unfavorable situation, if not an entire loss. The impact of the default can thus be significantly more far-reaching, both in terms of its impact on international markets and of its effect on the country's population. A government in default can easily become a government in chaos, which can be disastrous for other types of investment in the issuing country.

by CloudScout

The Causes of Debt Default

Essentially, default will occur when a country's debt obligations surpass its capacity to pay. There are several circumstances in which this can happen:
 

• During a currency crisis
  The domestic currency loses its convertibility due to rapid changes in the exchange rate. It becomes too expensive to convert the domestic currency to the currency in which the debt is issued.
   
• Changing economic climate
  If the country relies heavily on exports, especially in commodities, a significant reduction in foreign demand can shrink GDP and make repayment costly. If a country issues short-term sovereign debt, it is more vulnerable to fluctuations in market sentiment.
   
• Domestic politics
  Default risk is often associated with unstable government structure. A new party that seizes power may be reluctant to satisfy the debt obligations accumulated by the previous leaders.

Debt Default Examples

There have been several prominent cases in which emerging economies got in over their heads when it came to their debt.
 

• North Korea (1987)
  Post-war North Korea required massive investment in order to jump start economic development. In 1980 it defaulted on most of its newly-restructured foreign debt, and owed nearly $3 billion by 1987. Industrial mismanagement and significant military spending led to a decline in GNP and ability to repay outstanding loans.
   
• Russia (1998)
  A large portion of Russian exports came from the sale of commodities, leaving it susceptible to price fluctuations. Russia's default sent a negative sentiment throughout international markets as many became shocked that an international power can default. This catastrophic event resulted in the well documented collapse of long-term capital management.
   
• Argentina (2002)
  Argentina's economy experienced hyperinflation after it began to grow in the early 1980s, but managed to keep things on an even keel by pegging its currency to the U.S. dollar. A recession in the late 1990s pushed the government to default on its debt in 2002, with foreign investors subsequently ceasing to put more money into the Argentine economy.

Investing in Debt

Global capital markets have become increasingly integrated in recent decades, allowing emerging economies access to a more diverse pool of investors using different debt instruments. This gives emerging economies more flexibility, but also adds uncertainty since debt is spread over so many parties. Each party can have a different goal and tolerance for risk, which makes deciding the best course of action in the face of default a complicated task.

Investors purchasing sovereign debt have to be firm yet flexible. If they push too hard on repayment, they might accelerate the economy's collapse; if they don't press hard enough, they might send a signal to other debtor nations that lenders will cave under pressure. If restructuring is required, the goal of the restructure should be to preserve the asset value held by the creditor while helping the issuing country return to economic viability.
 

• Incentives to repay
  Countries with unsustainable levels of debt should be given the option of approaching creditors to discuss repayment options without being taken to task. This creates transparency and gives a clear signal that the country wants to continue loan payments.
   
• Providing restructuring alternatives
  Before moving to debt restructuring, indebted nations should examine their economic policies to see what sorts of adjustments can be made to allow them to resume loan payments. This can be difficult, if the government is headstrong, since being told what to do can push them over the edge.
   
• Lending prudently
  While investors might be on the lookout for diversification into a new country, that doesn't mean that flooding cash into international securities will always have a positive result. Transparency and corruption are important factors to examine before pouring money into expensive endeavors.
   
• Debt forgiveness
  Due to the moral hazard associated with letting debtor countries off the hook, creditors consider wiping a country's debt clean to be the absolute last thing that they want. However, countries saddled with debt, especially if that debt is owed to an organization such as the World Bank, can seek to have their debt forgiven if it will create economic and political stability. A failed state can have a negative effect on surrounding countries.
•  

Conclusion
The existence of international financial markets makes funding economic growth a possibility for emerging economies, but it can also make debt repayment troublesome by making collective agreements between creditors more complex. With no strict mechanism in place to make the resolution of problems streamlined, it is important for both the sovereign debt issuer and investors to come to a mutual understanding – that everyone is better off coming to an agreement instead of letting the debt go into default.