IMF Policy Discussion Papers

External Borrowing in the Baltics, Russia, and Other States of the Former Soviet Union: The Transition to a Market Economy

Author/Editor:

John C. Odling-Smee ; Basil B. Zavoiceo

Publication Date:

May 1, 1998

Electronic Access:

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Summary:

The external debt of many countries of the Baltics, Russia, and the former Soviet Union has been growing rapidly in recent years and has played an important part in the transition process. However, it is vital to strike a balance between financing transition and ensuring that the external debt is not used to finance wasteful expenditures or delay the transition process. This is especially important since the rising stock of external debt makes the borrowing countries increasingly vulnerable to changes in perceived creditworthiness. Accordingly, countries must adopt policies, including pressing ahead with structural reforms, to ensure that the borrowing is used to promote sound growth.

Series:

Policy Discussion Paper No. 1998/005

Subject:

Budget planning and preparation Debt financing External debt Government debt management Macrostructural analysis Public debt Public financial management (PFM) Structural reforms