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Many countries among the Baltics, Russia and other CIS states are increasingly borrowing on international capital markets, a development that generally reflects their success in achieving financial stabilization. In view of the low level of domestic saving and large capital requirements, recourse to foreign borrowing may of course generate significant benefits for these economies in transition. However, the rapid increase in external debt suggests that consideration also needs to be given to the risks from too high a dependence on foreign saving, including inter alia risk of the postponement of needed structural reforms.

Exports and Imports --- Public Finance --- International Lending and Debt Problems --- Debt --- Debt Management --- Sovereign Debt --- International Investment --- Long-term Capital Movements --- International economics --- Public finance & taxation --- Finance --- External debt --- Debt service --- Public debt --- Foreign direct investment --- Debt service payments --- Balance of payments --- Debts, External --- Debts, Public --- Investments, Foreign --- Russian Federation

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This paper provides updated information on the external debt problem of sub-Saharan Africa. Between 1980 and 1990 the region’s external debt more than tripled, to US$171 billion, while debt service payments and rescheduling rose by more than 150 percent to US$20 billion. In addition, the region continues to qualify as severely debt-distressed. During the last few years the region has benefitted from several new debt initiatives, including a substantial increase in debt cancellation by bilateral creditors and the general application of Toronto terms for debt rescheduling. There are also proposals for further debt assistance, including more liberal rescheduling terms, broader debt forgiveness, and consolidating debt relief and aid generation activities.

Exports and Imports --- Financial Risk Management --- Macroeconomic Aspects of International Trade and Finance: General --- Comparative Studies of Particular Economies --- International Lending and Debt Problems --- Debt --- Debt Management --- Sovereign Debt --- International economics --- Finance --- Debt service --- External debt --- Debt service payments --- Debt relief --- Public and publicly-guaranteed external debt --- Asset and liability management --- Debts, External --- United States

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This paper outlines a procedure for calculating the cash value of “menu items” in debt restructuring proposals, including par and non-par exchanges, with enhancements consisting of either interest or principal guarantees. It is argued that under certain plausible assumptions interest and principal guarantees are directly equivalent to cash buy-backs. Using these assumptions, formulas to calculate the exchange ratios, resource requirements, interest rates, and net debt reduction for particular menu items are derived. It is shown that there is not a direct relationship between the exchange discount and the market price.

Currencies --- Debt Management --- Debt reduction --- Debt restructuring --- Debt service payments --- Debt service --- Debt --- Debts, External --- Exports and Imports --- Finance --- Financial Risk Management --- Government and the Monetary System --- Interest payments --- International economics --- International Lending and Debt Problems --- Monetary economics --- Monetary Systems --- Money and Monetary Policy --- Money --- Payment Systems --- Regimes --- Sovereign Debt --- Standards

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This paper discusses the Heavily Indebted Poor Countries (HIPC) Initiative in the perspective of sizable historical debt relief and large positive net resource flows to HIPCs. It argues that, by substantially reducing HIPCs’ debt stocks and debt service payments, the Initiative provides a solid basis for debt sustainability and room for increased social spending. For poverty reduction, HIPC relief is important but broader international support is needed. The paper maintains that, as experience has shown, external support can be effective only if it reinforces sound policies implemented by HIPCs themselves. Thus, debt relief and official development assistance are critical as “help for self-help.”.

Exports and Imports --- Financial Risk Management --- Social Services and Welfare --- International Lending and Debt Problems --- Foreign Aid --- Macroeconomic Analyses of Economic Development --- Debt --- Debt Management --- Sovereign Debt --- Government Policy --- Provision and Effects of Welfare Program --- Finance --- International economics --- Social welfare & social services --- Debt relief --- Debt reduction --- Debt service --- Debt service payments --- Poverty reduction strategy --- Asset and liability management --- External debt --- Poverty --- Debts, External --- United States

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In an economy with a debt overhang, investment depends on expected tax rates. On the other hand, expected tax rates depend on the debt’s face value. Therefore investment depends on the face value of debt. I show that this may lead to a positive or negative association between debt and investment depending on the degree of international capital mobility and attitudes toward risk. There may also exist multiple equilibria; with high and low investment levels. The paper explores the desirability of debt reduction in this environment. First, it characterizes circumstances in which debt reduction is desirable from the collective point of view of the creditors. Second, it formulates the forgiveness decision as a noncooperative game among creditors and explores the scope for debt reduction as an outcome of this game.

Asset and liability management --- Capital market --- Debt Management --- Debt reduction --- Debt relief --- Debt service payments --- Debt service --- Debt --- Debts, External --- Exports and Imports --- External debt --- Finance --- Finance: General --- Financial institutions --- Financial Instruments --- Financial markets --- Financial Risk Management --- General Financial Markets: General (includes Measurement and Data) --- Institutional Investors --- International economics --- International Lending and Debt Problems --- Investment & securities --- Investments: Stocks --- Non-bank Financial Institutions --- Pension Funds --- Securities markets --- Sovereign Debt --- Stocks --- Peru