The Global Emerging Markets Risk Database, known as GEMs, contains information from 26 development finance institutions covering 20,000 contracts over 30 years. GEMs is run by a consortium of the 26 contributing development finance institutions.
GEMs officials were in a celebratory mood at a forum on Oct. 23, discussing the significance of a recent report based on the data. The future is hazy.
GEMs Data and Default Rates
The average default rate on private loans in the GEMs database was 3.6 percent, roughly comparable to average default rates observed in noninvestment grade companies that receive a B credit rating from S&P and a B3 from Moody’s.
The GEMs statistics also reveal that recovery rates were higher than expected, on average, 72 percent. This information is valuable for investors.
Related: GEMs Consortium Releases New Data Amid Criticism
Private sector representatives appreciated the new reporting, but recommended revealing more about investment returns, investment impacts, and state-owned enterprises. They suggested more regular reports, and with more detail.
Calls for Transparency
Calls for more transparency of GEMs data have been circulating for several years and came most significantly from a special committee created by the G-20 in a 2022 report. Nancy Lee, a member of the G-20 Independent Expert Group, said much more needs to be disclosed to meet the G-20 goals.
Gary Forster summarized a new report.
GEMs Consortium Governing Body
The GEMs consortium governing body meets privately several times a year but does not disclose any minutes. Eye on Global Transparency requested the minutes and is appealing the denial of the request.
Related: China Blasts New US Trade Tariffs
The GEMs database provides a unique insight into the performance of private sector investments.
For now, the consortium is considering the suggestions made by the private sector representatives. While some of the suggestions are being looked into, it is unclear what the outcome will be.
One thing is certain: the demand for more transparency and disclosure of GEMs data will continue to grow.
They will likely continue to face calls for transparency.
