The External Debt Problem in Central America: Honduras, Nicaragua, and the HIPC Initiative

Gerardo Esquivel (), Larraín F.B. and J.D. Sachs

Working Papers from Harvard - Institute for International Development

Abstract: This paper reviews the foreign debt burden in Central America with special emphasis on Honduras and Nicaragua, which have a large debt overhang. Several indicators suggest that this foreign debt seriously impedes economic growth in both nations. Honduras and Nicaragua, the poorest countries of Central America, have lagged behind the rest of the region in growth, resulting in an increase in regional income inequality during the 1990s. Analysis suggests that Honduras and Nicaragua require alleviation of their foreign debt as a prerequisite to sustained growth. This paper also evaluates the prospects of these countries to qualify for the new initiative aimed at reducing the debt burden of the highly indebted poor countries (the so-called HIPC Initiative). It concludes that Honduras and Nicaragua have favorable prospects of qualifying for the HIPC Initiative.

Keywords: FOREIGN DEBT; ECONOMIC GROWTH (search for similar items in EconPapers)
JEL-codes: H63 H63 O40 (search for similar items in EconPapers)
Date: 1998
View citations in EconPapers

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:fth:harvid:645

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Harvard - Institute for International Development
Address: CAER Project, Harvard Institute for International Development, 14 Story Street, Cambridge MA 02138O
Contact information at EDIRC.
Series data maintained by Thomas Krichel ().