How truth about debt sets a nation free

Honesty will be a prime topic at the Group of Seven summit this weekend in Japan. For leaders of these wealthy nations, there’s still too much secrecy around an estimated $326 billion in debt held by more than 70 low-income nations. A default by any one of them – or worse, a country caught lying about its statistics – could spark a global financial crisis.

“It is essential to improve debt data transparency and accuracy to prevent future debt crises,” says Japanese Finance Minister Suzuki Shunichi.

Yet the fact that the G-7 is even pressing more nations to be open about their debt details is a testament to the honesty already achieved in official data. Since the 1994-95 Mexican financial crisis, both the World Bank and International Monetary Fund have raised global standards by helping dozens of countries adopt advanced reporting systems. “We are working hard to make statistics more comprehensive and available,” says David Malpass, the departing World Bank president. In some countries, criticism of official data is still a crime.