Archived Series > World Economic and Financial Surveys
Abstract
This paper reviews trends in official debt rescheduling and recent experience with debt renegotiations in the face of the persistent problems of heavily indebted developing countries.
Abstract
This paper describes developments in multilateral official debt renegotiations over the 18 months through December 1987. The most important new departure in multilateral official debt renegotiations was the adaptation of policies by Paris Club creditors in response to the protracted problems of the poorest and most heavily indebted countries at the same time that other initiatives were launched for low-income countries, including the proposal for enhancement of the IMF’s structural adjustment facility. Official creditors have generally preserved concessional interest rates in the restructuring of official development assistance (ODA) loans; moreover, for the poorest debtors, some creditors have converted such loans into grants. The question of interest concessions on other categories of debts rescheduled by the Paris Club was raised, inter alia, by the Venice summit but no consensus exists among creditors for changing the current practice. By regularly excluding short-term debt from reschedulings, debtors and creditors have also frequently succeeded in protecting the flow of short-term trade financing, which is often vital to the financing of an IMF-supported program.
Abstract
This paper discusses developments and issues concerning export credits from the perspective of the economic adjustment process of indebted developing countries. This emphasis is consistent with the principle that officially supported export credit—whether it takes the form of direct official credits or insurance and guarantees on privately funded credits—is an instrument of commercial financing for exports and not a means of aid finance. All creditor governments have a broad range of objectives in using the economic instruments at their disposal to help overcome the adjustment problems of heavily indebted countries, with which important bilateral trade relations are being maintained. In support of an expansion in world trade and notwithstanding the competitive element, export credit insurance and guarantees may have a special role in helping to catalyze private credit flows, especially since such a role coincides with the interest of private lenders to shift away from general purpose balance of payments finance to trade and project finance.
Abstract
This paper describes developments in multilateral official debt renegotiations over the 18 months up to the end of June 1986. To facilitate the return to normal market access for countries considered to have made substantial progress in their adjustment efforts, official creditors recently concluded multiyear rescheduling agreements (MYRAs) with both Ecuador and Cote d'Ivoire. Official creditors have also indicated that they were prepared to grant an extended consolidation period for Yugoslavia, although in this case a further meeting would be necessary to agree on the terms for the second stage of the rescheduling. The tendency toward increased differentiation in terms according to the circumstances of the debtor country, already apparent in 1983–1984, has been carried further during the last 18 months. Indeed, the rescheduling agreements concluded during this recent period tend to fall fairly clearly into two very different groups. Official multilateral debt renegotiations deal with the rescheduling of debt service payments on loans extended by, or guaranteed by, the governments or the official agencies of the participating creditor countries.