The problem of debt in developing countries

Résumé du document

In the beginning of the millennium, a refreshing urgency is inspiring the search for lasting solutions to the debt problems of developing countries, especially the poorest of them. One problem that has been the focus of much attention and contention over the years, with serious implications for the enjoyment of human rights, is that of foreign debt. The debt of many developing countries, and particularly of the heavily indebted poor countries (HIPCs), has not been resolved, despite important and significant measures and initiatives adopted by creditors at the national or multilateral levels. Policies of adjustment and efforts to integrate HIPCs into the global economy should be based on an examination of this phenomenon, as it relates to other development priorities.

Extraits

[...] (The crisis in Mexico in 1982 is a good example of this trend.) At this same time, the International Monetary Fund (IMF) emerged as the guarantor of the creditworthiness of developing countries. The IMF had performed this role in the past, but primarily with regard to its "own" money - that is, money lent by the IMF to assist countries in addressing balance of payments problems. This new emphasis on creating conditions primarily to assure payments to private institutions, while in theory not a new undertaking, was different in character and content from what the IMF had done in the past, largely because of the enormous amount of money involved. [...]

[...] The debt management capacity in debtor countries should also be strengthened. II. The causes of the debt crisis The conventional explanation is that the debt crisis of the 1980s was due to a number of highly contingent circumstances that were essentially unpredictable at the time many of these loans were made. The main causes can be summarized as follows: The external debt crisis that emerged in many developing countries in 1982 can be traced to higher oil prices in 1973-74 and 1979-80, high interest rates in 1980-82, declining export prices and volume associated with global recession in 1981-82, problems of domestic economic management, and an adverse psychological shift in the credit markets. [...]

[...] The banks assumed that sovereign debt was a good risk since there was a prevalent belief that countries would not default. Many developing countries, reeling from oil price increases, were eager to receive these loans. These countries assumed that loans were an intelligent way to ease the trauma of the oil price increases, particularly given the very high inflation rates at the time. Other developing countries, the oil-exporting ones (Colombia, Ecuador, Mexico, Nigeria, and Venezuela, for example), saw the loans as a way to capitalize on their much-improved financial status, and they assumed that oil prices would remain high in real terms for an extended period of time. [...]

[...] Like Clinton, Sachs opines that the IMF should sell off about one third of its gold to eliminate billion in debt for forty countries. Sachs also states that the United States should write off approximately billion in loans to the poorest countries. Sachs points out that the United States' burden from his debt relief plan will be minor because realistically only 10 percent of the total amount on these outstanding loans is collectible. Bibliographie indicative Dealing Fairly with Developing Country Debt par Christian Barry et Barry Herman (Broché - 28 janvier 2008) Adjustment Crisis in the Third World par Richard E. [...]

[...] There was no evidence, before 1973, that this condition of relative poverty was changing in any but a few of the developing countries, such as the newly industrializing countries of South Korea, Singapore, and Taiwan. In fact, most of the traditional measures of economic development suggest that most developing countries were falling farther behind the advanced industrialized countries at an increasingly faster rate. The developing countries will always be relatively poorer than the advanced industrialized countries as long as they rely heavily on primary commodities, such as copper and rubber, for export earnings. [...]