Managing Government Guarantees and Contingent Liabilities

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In order to encourage private sector participation in infrastructure development, the government provided guarantees to a number of infrastructure projects covering a wide variety of project-specific and general risks. In bearing such risks, however, the government invariably becomes exposed to contingent claims that can be triggered by certain events. Can something be done therefore to deal with this? This Policy Notes addresses this concern as it draws an outline of a risk management approach that deals with expected and unexpected losses from contingent liabilities.