The External Debt-Servicing Capacity of Asian Developing Countries

During the past ten years, the external debts of the developing countries have increased at an unprecedented rate. According to estimates of the Organisation for Economic Co-operation and Development (OECD), the total long-term debt (disbursed) of 158 developing countries increased at an annual rate of 19.3 per cent between 1972 and 1982, reaching $626 billion at the end of 1982. The World Bank has estimated that the external debt of 98 developing countries increased at about the same rate over the period, totalling $529 billion at the end of 1982. A notable feature of the change in the external debt situation of the developing countries is that their debt-service payments have increased at a much faster rate than their debt outstanding. This is because of the rapid growth in their borrowings from foreign commercial banks and rising international interest rates…