POSC 3250 Lecture Notes - Lecture 10: Heavily Indebted Poor Countries, Debt Service Ratio, Debt Relief
29 Mar 2016
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Phase 1: private sector collecive acion problems. Phase 2: imf debt crisis management regime, assumed problem was short term, e. g. liquidity/foreign exchange crises, provide imf/world bank structural adjustment loans (sal) - short to medium term loans. Given under the circumstance that you will change domesic policies: re-establish condiionality. Post 1985- adopt neo-liberalism- current account surpluses, savings, and. Economic reforms: deregulaion, privaizaion, export led growth, government cutbacks, establish creditor clubs to negoiate debt reconstrucing . Debt rescheduling- reduce size of current payments. Debt relief/forgiveness/reducion- reduce size of total debt. E. g. states had to agree imf sal to qualify. London club- private commercial banks: phase 2 failed for many states. Phase 3: direct northern (us and g7/8) management, purpose: minimize risk to inancial system, banking reform, case by case crises management. Baker plan (1982-88)- emergency lending but no relief. Brady plan (1989-97)- limited debt reducion: heavily indebted poor countries iniiaive (hipc)
