Archived Series > World Economic and Financial Surveys
Abstract
This paper reports the growing number of low-income countries that are making efforts to resolve their debt problems, often aided by the resources of the debt reduction facility for countries of the International Development Association (IDA). Progress for most, however, remains slow. With the backing of IDA resources and assistance from official bilateral sources, debt buy-backs have been concluded by Bolivia, Guyana, Mozambique, Niger, Sao Tome and Principe, Uganda, and Zambia. Preliminary discussions on similar operations are under way with several other countries. Although most of the major baric debt cases have been resolved, attention still needs to be focused on the problems of low-income countries. In many of these countries, the process of debt restructuring has been delayed owing to economic and political difficulties. To maintain market access on reasonable terms, countries need consistently to implement strong macroeconomic and structural policy programs. Maintenance of such programs is likely to be particularly important in the period ahead, given the high degree of uncertainty with regard to interest rate movements in the industrial countries.
Abstract
This paper provides information on private market financing for developing countries, covering developments since August 1992. Progress in dealing with bank debt problems has been based in large part on persistence in the pursuit of stabilization and reform programs. Such programs have resulted in strengthened external positions that have allowed debtor countries to accumulate reserves for use in debt-reduction operations. All of the countries where negotiations are now continuing had at some point suspended payments on medium- and long-term debt. Banks have recognized that resumption of regular (albeit partial) payments can be politically difficult in the absence of a quid pro quo. The group of middle-and lower-middle income countries with debt problems still to come to terms with bank creditors on debt-reduction packages is now limited. Many of these remaining countries (including Bulgaria, Ecuador, Panama, Peru, and Poland) have already begun negotiations with creditor banks.
Abstract
This paper presents a survey by IMF staff of recent trends in private market financing for developing countries. In addition to summarizing recent developments in capital flows to developing countries through banking and securities markets, it analyzes three issues of particular interest in the debt and financing outlook for developing countries. The underlying structure of market financing for several developing countries has undergone significant change in the recent past. The change has been prompted by recognition of the adverse impact of continued uncertainty about debt refinancing terms and of a growing debt stock on countries’ development prospects, and by a concurrent reduction in banks’ financial vulnerability arising from their developing country portfolios. The analysis focuses on the extent to which capital repatriation may be influenced by such specific actions as amnesties, capital account liberalization, the availability of foreign-currency denominated instruments, and debt conversion schemes.