World Bank Document

Middle-income countries
Major exporters of mantufacturers
Other oil-imrporting countries
Oil-exporting countries
High Low High Lou, High Low
1984' 1990 1990 1984' 1990 1990 1984' 1990 1990
20.0 -4.9 14.6 -9.8 -8.2 -2.2 17.1 -1.8 9.8
-26.4 -19.3 -33.7 -8.2 -6.3 -10.9 -21.7 -14.8 -26.2
-3.9 -4.4 -6.3 -2.5 -2.9 -4.2 -2.9 -3.3 -4.9
-22.5 -14.9 -27.4 -5.7 -3.5 -6.7 -18.9 -11.5 -21.3
-9.6 -19.7 -15.0 -15.4 -10.8 -10.7 -3.6 -10.2 -9.2
3.8 6.0 5.7 2.6 2.9 2.8 1.9 2.0 1.9
17.9 21.2 12.9 11.1 6.2 5.3 13.6 10.2 9.3
7.8 3.7 3.7 5.5 4.6 4.5 6.3 4.8 4.8
10.1 17.5 9.2 5.6 1.6 0.8 7.3 5.4 4.5
273.1 274.1 280.6 110.6 107.4 116.8 237.6 214.4 235.6
37.6 25.9 30.6 53.0 39.9 47.6 43.8 29.5 34.7
109.1 67.8 97.0 183.9 139.5 189.5 164.3 129.1 163.5
16.0 12.9 24.2 24.9 22.0 36.9 28.1 22.7 35.9
a. Estimated.
b. Excludes official transfers.
c. Net disbursements.
Source: World Bank data.
dollars, they increase by 3.8 percent a year in the pressures for "involuntary" lending would be
High simulation and decline by 1.7 percent a year greatly increased.
in the Low. In addition, interest rates increase significantly
in the Low simulation, so that interest Policies and priorities
payments on medium- and long-term debt would
increase from $58 billion in 1984 to $100 billion in The projections made in this chapter underline the
current prices (and $76 billion in 1980 dollars) in essential message of the Report: the world has
1990. Given the small amount of new capital they made progress in overcoming the financial difficulwould
obtain, developing countries would virtu- ties of the early 1980s, but it still has much to do.
ally have to double their trade surpluses just to Debt cannot be seen in isolation, as something that
satisfy their interest obligations. It is generally occasionally becomes a "crisis," needing urgent
doubtful whether they could do that-or whether attention. On the contrary, international finance is
an increasingly protectionist trading regime would an essential part of economic development in an
even allow them to try.
interdependent world. If it reaches the proportions
The full extent of the difficulties of the Low sim- of a crisis, that is because countries have misulation
are apparent from the indicators of devel- handled their policies over many years.
oping countries' indebtedness. If current account The constructive and collaborative actions by
deficits should increase as projected, in 1980 dol- debtors, creditors, and international institutions to
lars, from $36 billion in 1984 to $49 billion in 1990, smooth out debt service payments in the context
the outstanding debt of all developing countries of countries' adjustment efforts needs to be continwould
fall only slightly from the high present level ued. The objective is to accelerate the return to
of about 135 percent of exports, and the debt ser- creditworthiness of countries that are pursuing
vice ratio would rise to 28 percent, from 20 percent sound economic policies and have sizable short- to
in 1984. Three groups of countries-low-income medium-term debt-servicing requirements. Con-
Africa, middle-income oil importers (aside from sideration needs to be given to the extent to which
the main exporters of manufactures), and the oil multiyear debt restructurings for official credits
exporters-would have debt service ratios of about and other arrangements might be considered on a
36 percent. The need for reschedulings and the case by case basis as part of the overall financial
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