Rescheduling Sovereign Debt: Is There a Better Approach?

Abstract

The World EconomyVolume 5, Issue 3 p. 279-290 Rescheduling Sovereign Debt: Is There a Better Approach? Jeffrey E. Garten, Jeffrey E. Garten JEFFREY E. GARTEN: Vice President, Lehman Brothers Kuhn Loeb Inc., investment bankers, New York, and Adjunct Professor of Political Economy, New York University; formerly Deputy Director of the Policy Planning Staff, United States Department of State, Washington, 1977–78.Search for more papers by this author Jeffrey E. Garten, Jeffrey E. Garten JEFFREY E. GARTEN: Vice President, Lehman Brothers Kuhn Loeb Inc., investment bankers, New York, and Adjunct Professor of Political Economy, New York University; formerly Deputy Director of the Policy Planning Staff, United States Department of State, Washington, 1977–78.Search for more papers by this author First published: November 1982 https://doi.org/10.1111/j.1467-9701.1982.tb00056.xCitations: 1 This article, based on a discussion paper prepared for the Council for Foreign Relations, New York, in May, reflects the author's personal views and should not be attributed to any institution with which he is affiliated. Reference is to non-oil exporting developing countries. Sources for statistics are World Economic Outlook (Washington: International Monetary Fund, 1982); World Debt Tables, 1981, World Bank, Washington; Development Cooperation, 1981 Review (Paris: Organisation for Economic Cooperation and Development, 1981); and World Financial Markets, Morgan Guaranty Trust Company, recent issues. Because of problems relating to comparable methodology, statistics for Eastern Europe are not included in the text, but the ‘Statistical Abstract of East-West Trade Finance’ (United States Department of Commerce, Washington, mimeograph, dated 25 June 1982) indicates a total hard-currency external debt for the Soviet Union and Eastern Europe (including Yugoslavia) of $108 billion as of 31 December 1981 (up from the total at the end of 1977 of $60 billion). These figures include medium-term and long-term debt held or guaranteed by governments as well as unguaranteed private debt. They do not include short-term debt — that is, debt which matures in less than twelve months. Morgan Guaranty has estimated that 31 per cent of all total external debt of the 21 largest developing-country borrowers is due in one year or less. One view of some of the shortcomings can be found in ‘A Nightmare of Debt’, The Economist, 20–26 March 1982. See also Chandra Hardy, Rescheduling Developing Country Debts 1956–1980: Lessons and Recommendations (Washington: Overseas Development Council, 1981). The ‘Group of Thirty’ has also been looking into the subject, its findings being reflected in Risks in International Lending (New York: Group of Thirty, 1982). The Paris Club has no formal rules and no legal status. Its meetings, not necessarily held in Paris, are chaired by the French Ministry of Finance and Economics. IMF officials often attend the meetings, along with representatives of the World Bank, the Organisation for Economic Cooperation and Development (OECD) and the United Nations Conference on Trade and Development (UNCTAD), as observers. Floating-rate notes are issued like bonds and are tradeable. But, as their name implies, interest is adjusted periodically to reflect prevailing rates. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Citing Literature Volume5, Issue3November 1982Pages 279-290 RelatedInformation