This paper draws heavily on a similarly titled paper presented at the Third Dubrovnik Conference on Transition Economies (June 25–27, 1997) and which will appear in the proceedings of that conference to be published by the National Bank of Croatia. We are grateful to Ishan Kapur, Jorge Márquez-Ruarte, and Emmanuel van der Mensbrugghe for many helpful comments.
The concept of external debt in this paper embraces debt financing from all foreign sources, including from other BRO countries.
The BRO region includes fifteen countries: Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Moldova, Russian Federation, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. The reason for treating them as a group rather than, say, also including transition countries in central Europe or, alternatively, excluding the Baltics is that—apart from Russia—they share the common characteristic of zero or close to zero external debt at the end of 1991.
For a more detailed analysis of external financing developments in the BRO as well as a discussion of selected policy issues, see WP/97/72, External Borrowing by the Baltics, Russia, and Other Countries of the Former Soviet Union: Developments and Policy Issues, by Ishan Kapur and Emmanuel van der Mensbrugghe (June 1997).
Most of the data cited in this paper are subject to wide margins of error, and can be used only to indicate broad orders of magnitude.
Arrears were a larger problem than indicated in the table because those that were subsequently consolidated into intergovernmental loans appear as official loan disbursements rather than accumulation of arrears.
From early 1992 most countries incurred monetary obligations to the Central Bank of Russia through their positions in the correspondent accounts of their central banks. For most countries, these obligations were converted into government debt to Russia.
Mainly Armenia, Georgia, Kyrgyz Republic, and Tajikistan.
However, only the Baltic countries have investment grade ratings
Up to mid-1993 a similar mechanism, which also generated external debt, was the debiting of liabilities for imports to the correspondent accounts between central banks.