III Assisting Member Countries in the Management of Their External Debt
  • 1 https://isni.org/isni/0000000404811396, International Monetary Fund

Abstract

As a counterpart to the rapid increase in international bank lending, the external debt of borrowing countries, and especially that of non-oil developing countries, has risen dramatically in recent years. At the end of 1982, the total reported external debt of non-oil developing countries was $633 billion (plus about $100 billion of unreported short-term debt, mainly to suppliers and parent companies of subsidiaries), compared with about $130 billion at the end of 1973. To be sure, there has been a rapid growth of exports, and the ratio of total external debt to exports has not increased as rapidly as the ratio of total debt to gross domestic product. Since the origin of borrowed funds has shifted during the period from official sources to private sources31 with market-related variable interest rates and since interest rates have increased sharply, there has been a rapid deterioration in debt service ratios (the ratio of interest plus amortization to exports of goods and services standing at 23 percent in 1982 against 16 percent in 1973) and of the ratio of interest to current account receipts (11 percent in 1981 against 5.5 percent in 1970).32 Repayment obligations will thus represent a growing proportion of gross external financing requirements, amounting to more than one half of the gross external financing requirements of non-oil developing countries in the next five years. These obligations amounted to $200 million during the period 1977–81 (against $280 million in net borrowing requirements) and might reach $400 million during the period 1982–86.

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