Third world debt Problem
The author examines key elements in the debt situation of a small number of developing countries which owe $600 billion to a small number of large banks in 10 industrialized countries. Most of the debt resides in Latin America. Shrinkage of the debt will also slow economic growth in these countries. Three solutions include purchase of the debt by an international agency, indexation of loan rates to inflation, and the preferred approach in which debtor countries slow their borrowing and adopt internal austerity programs that reduce trade deficits through reduced inflation and enhanced exports. Each of these approaches is a band-aid solution. The fundamental long-term solution is one where the world economy grows at a healthy rate with moderate inflation.
- Research Organization:
- Pacific Gas and Electric Co., San Francisco, CA
- OSTI ID:
- 6640767
- Journal Information:
- J. Energy Dev.; (United States), Vol. 9:1
- Country of Publication:
- United States
- Language:
- English
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