Chapter

I Introduction

Author(s):
International Monetary Fund
Published Date:
December 1995
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Three principal developments in recent official financing for developing countries have been the agreement in december 1994—and subsequent implementation in selected cases—of naples terms for low-income countries by paris club creditors, the increasing focus on the issue of multilateral debt, and the support provided by official creditors in early 1995 to mexico.1 in addition to a review of developments in official financing for developing countries, this report attempts to provide an assessment of the effects of stock-of-debt operations on naples terms on the debt situation of the low-income rescheduling countries. In so doing, the report takes a preliminary look at the extent to which stock-of-debt operations on naples terms by paris club creditors, assuming comparable treatment by other official bilateral and private creditors, will produce a sustainable overall external debt position for these countries.

This report is organized as follows: section ii sum-marizes recent developments in official bilateral flows, export credits, multilateral flows, external debt and debt service, and reschedulings by paris club creditors. Section iii examines external debt-sustainability issues for heavily indebted poor countries; it looks at the impact of hypothetical stock-of-debt operations on naples terms by paris club creditors on debt service in 1995 for 27 low-income rescheduling countries, and on debt service and external financing over 20 years for 14 of these countries. Sections iv through vii provide more detailed background information on official bilateral flows, export credits, multilateral flows, external debt and debt service, and bilateral reschedulings by official creditors.

This support is not reflected in the data used in this report as it occurred after the end of 1994. The implications of the Mexican crisis for private flows to developing countries are discussed in private market financing for developing countries, world economic and financial surveys (washington: international monetary fund, november 1995).

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