External Debt Histories of Ten Low-Income Developing Countries: Lessons from Their Experience
IMF Working Papers, May 1, 1998
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- External Debt Histories of Ten Low-Income Developing Countries: Lessons from Their Experience
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Bibliographic details
- Authors: Kevin Ross, R. Brooks, Robert Powell, Ydahlia A. Metzgen Quemarez, Doris C Ross, Mariano Cortes, Saqib Rizavi, Benoit Ketchekmen, Francesca Fornasari
- Published: May 1, 1998
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451849318.001
Summary findings
- The external debt burden of many low-income developing countries has increased significantly since the 1970s.
- Developments in a sample of ten countries show that the main factors behind the buildup of debt were:
- (1) exogenous (adverse terms of trade shocks or weather)
- (2) a lack of sustained macroeconomic adjustment and structural reforms
- (3) nonconcessional lending arid refinancing policies of creditors
- (4) inadequate debt management
- (5) political factors (civil war and social strife)
Causes and mechanisms
- Exogenous shocks:
- Adverse terms of trade shocks
- Weather events
- Domestic policy and institutional weaknesses:
- Lack of sustained macroeconomic adjustment
- Incomplete structural reforms
- Inadequate debt management
- External creditor behavior:
- Nonconcessional lending
- Refinancing policies of creditors
- Political instability:
- Civil war and social strife contributing to higher debt burdens
Policy recommendations and implications
- Future policies should:
- Limit the need for external financing
- Create an environment conducive to diversifying export growth
- Manage debt more prudently
- Base economic projections on more cautious assumptions
Subject areas and keywords
- Subject: Agricultural commodities, Commodities, Debt burden, Export performance, Exports, External debt, International trade
- Keywords: Agricultural commodities, Bolivia's export earnings, commodity price projection, concessional terms, debt, Debt burden, debt problem, debt-servicing capacity, export, export base, export concentration, Export performance, export receipt, Exports, External Debt, financing needs, Global, HIPCs, Low-Income Countries, Niger, oil price projection, price, prudent debt strategy, world oil price projection, WP, Zambia