-income countries, in contrast to recent debt crises in emerging market economies, developed in slow motion. Payment difficulties—the first manifestation of problems—were initially addressed through new net lending and repeated debt-servicereschedulings, first on commercial and, subsequently, on increasingly concessional terms. In fact, net flows to low-income countries (that is, grants and loans minus debt service paid) remained positive, averaging 13 percent of GDP a country over 1984–96, but much of the new capital was in the form of new debt, which added to the countries
million from lower interest payments on debtservicerescheduled under Option A and the remainder from the direct reduction in interest rates under Option C. 18 These savings, amounting to some 1.3 percent of the total amounts consolidated, increase cash-flow relief during the consolidation period only marginally but reduce moratorium interest payments during the grace period by some 20 percent relative to previous rescheduling terms. Thus, while reschedulings on Toronto terms provide little additional immediate financing, the options approach enhances the progress
intensified during any of the programs. Where programs specified the liberalization of long-standing restrictions, however, the record is not so positive—4 programs were not implemented at all, and in 4 others only modest progress was made.
External debt . Sixteen of the programs reviewed included policies to prevent external debt and debt servicing from becoming a major burden. These policies encouraged the inflow of capital on appropriate terms or facilitated debtservicerescheduling where necessary. If arrears on debt service or other current payments existed, the
foreign assets and net domestic assets of the BCC are valued at the program exchange rates (1 SDR = CGF 687.4; US$1 = CGF 444.1; and 1 euro= CGF 605.3).
4/ 100% of any surplus (shortfall) over (under) the programmed amount of external budgetary assistance (excluding project assistance), net of debt service and including external debtservicerescheduling and relief under the HIPC initiative, that has not been used to finance poverty reduction expenditure, public enterprise restructuring, and domestic debt repayment (limited to cross-arrears certified by World Bank
The Congolese authorities requested an IMF staff-monitored program (SMP), in support of the economic program they spelled out in the accompanying Memorandum on Economic and Financial Policies (MEFP). The Democratic Republic of the Congo showed remarkable macroeconomic stability under the Poverty Reduction Growth Facility Program. The SMP is intended to preserve macroeconomic stability during the protracted elections and give the authorities an opportunity to establish a strong track record of policy implementation. The SMP includes measures for improving public resource management and strengthening central bank operations.
public enterprises). The various modalities adopted by creditors for delivering the assistance (grants, stock of debt reduction, or flow relief in the form of debtservicerescheduling) and their impact on fiscal variables will need to be clearly shown in IMF and World Bank documents. Governments should also be encouraged to include data on HIPC assistance in their budget documents.
12. HIPC assistance from the IMF may not immediately show up in the fiscal accounts . IMF HIPC assistance reduces the burden of debt service paid by the central bank in most countries
( Table 22 ) shows external debt falling due and paid). During 1995 and 1996 the Russian authorities reached agreements on debtservicereschedulings with all major groups of creditors, covering over 98 percent of the federal government’s external debt. Except for very small amounts due to a few non-Paris Club creditors, 63 by end–1996 Russia had completed the restructuring of its entire external debt. In doing so, the Russian government changed the terms of its obligations from an average maturity of about four years with a grace period of less than one year in 1993
current account deficit to reach 104 percent and 82 percent of GDP, respectively.
Movements in the capital account largely offset changes in the current account, with the overall balance of payments’ deficit increasing from US$3.9 million in 1994 to US$12.2 million in 1998. Most of this deficit was financed through the accumulation of external payments arrears, including to multilateral creditors. Also a debt- servicerescheduling was agreed with Paris Club creditors in 1994, and comparable treatment was extended by non-Paris Club bilateral creditors (Argentina and
Mr. Charalambos Christofides, Mr. Paul Mylonas, Ms. Inci Ötker, Mr. Liam P. Ebrill, Mr. Gerd Schwartz, and Mr. Ajai Chopra
Cash settlement of arrears
(In percent of exports of goods and nonfactor services in convertible currencies)
Debt service due in respect to current period’s obligations
Debt service paid in respect to current period’s obligations
Incurrence of new arrears