In effect, the smaller is the share of sovereign bonds in total public debt, the greater is the incentives facing private sector bond holders to free ride on the generosity of the multilateral financial institutions which hold the bulk of the debt.
I agree, therefore, with Mr. Otieno that the CACs cannot be seen as a substitute for a coherent and comprehensive international debt restructuring framework, however distant the prospect of such a framework is. One possible advance on the CAC which maintains the Contractual Approach to the problem might be to issue Contingent Convertible debt; sometimes called sovereign cocos.