Future financing needs of the highly indebted countries

Ishrat Husain and Saumya Mitra

No 254, Policy Research Working Paper Series from The World Bank

Abstract: Under base scenario assumptions, the authors estimate that the Baker 17 countries will require about $ 18 to $ 20 billion of net new disbursements annually to reverse recent investment trends and bring about modest growth in per capita incomes. The most significant shortfall is in commercial bank lending. Without an adequate burden sharing arrangement, it is unlikely that official creditors would be prepared to assume a disproportionately large exposure risk in these countries. Husain and Mitra conclude that with sound adjustment policies in the debtor countries, a combination of concerted new lending, debt reduction, reflows of flight capital, and intermittant accumulation of interest arrears will be the principal means of financing.

Keywords: Economic Theory&Research; Banks&Banking Reform; Financial Intermediation; Environmental Economics&Policies; Strategic Debt Management (search for similar items in EconPapers)
Date: 1989-08-31
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