Chapter 4 | Page 154 between Australia and Indonesia).65 Debt-for-social-protection exchanges are also an important approach to increasing public sector resources in States where financial constraints are limiting development programmes.66 The level and nature of borrowing are also linked to the economic cycle. It is important for the government to maintain public expenditure during economic downturns through increased debt financing. If the government cuts back on spending during such periods, the economy can deteriorate.67 Such ‘countercyclical fiscal policy’ is an essential consideration for human rights.68 It is argued that pro-cyclicality of the financial markets represents a significant risk for governments and overall human rights enjoyment which can exaggerate natural cycles in the finance market and have devastating effects on the economy of poor States.69 Another important consideration is the impact of macroeconomic variables such as interest rates on the ability of the government to raise financial resources through treasury bills and bonds. The World Bank predicts that the global imbalance of risk in financial markets could lead in the future to a widening of the emerging market bond spread and sudden swings in investor sentiment, which could result in more debt-servicing burdens on these most vulnerable economies.70 The consequence of increased public debt is likely to be a move towards a system of intergovernmental fiscal relationships, increased global market risk, reduced capacity to address future fiscal shocks and limited ability to meet social services through debt finance.71 It is estimated that, although the overall debt 65 See for example, Ross Buckley, Debt-for-Development Exchanges: History and New Applications (Cambridge University Press, New York, 2011). 66 John Langmore, 'Poverty Reduction through Social Protection: A Potential Form of Debtfor-Development Exchange' in Ross Buckley (ed), Debt-for-Development Exchanges: History and New Applications (Cambridge University Press, New York, 2011) 209. 67 Balakrishnan et al, above n 53, 17. 68 Ibid. 69 Mary Dowell-Jones and David Kinley, 'Minding the Gap: Global Finance and Human Rights' (2011) 25(2) Ethics & International Affairs 183-210, 200. 70 The World Bank, Global Development Finance: Mobilizing Finance and Managing Vulnerability (The World Bank, Washington, D.C., 2005). 71 KPMG International, Future State 2030: The Global Megtrends Shaping Governments 2013), 30.