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Debt-related problems of the non-oil less-developed countries

Journal Article · · Econ. Dev. Cult. Change; (United States)
DOI:https://doi.org/10.1086/451268· OSTI ID:6591556
The non-oil less-developed countries (NOLDCs) tripled the value of their external debt between 1975 to 1980 at the same time their resource transfer was held to 2% of gross national product (GNP). While the growth in debt burden to meet interest payments and acquire new financial assets grew twice as fast as GNP, the net of new assets to interest payments effectively made the real interest zero. This balance could deteriorate if oil prices rise again at the same time world trade and exports also deteriorate. Concerns among commercial banks and US regulators that the NOLDCs are poor risks may limit and possibly ration future recycling of funds to the NOLDCs. The present effective zero interest rate and, consequently, the economic growth of NOLDCs is dependent on continued inflation. (DCK)
Research Organization:
Boston Univ., MA
OSTI ID:
6591556
Journal Information:
Econ. Dev. Cult. Change; (United States), Journal Name: Econ. Dev. Cult. Change; (United States) Vol. 29:3; ISSN EDCCA
Country of Publication:
United States
Language:
English