If Sisyphus Stops Pushing the Mountain of Third World Debt?

The significance of the most recent World Bank Debt Tables is not the figure of 1035 billion dollars indebtedness as such, or the 1080 billion dollars it is expected to grow to by the end of 1987. If short-term trade credit and inter-bank loans are excluded — as they should be for the purposes of most discussion — these two figures would both fall by about a quarter. More significant than the figures themselves are two facts that emerge quite clearly from the tables. The first is that, despite the genuine efforts that most debtor countries have made to implement structural reforms, the share of bank lending to developing countries in total international lending has not revived; it has fallen from 27 per cent in 1982 to 1 per cent in 1986. The second is that the most heavily indebted countries have repaid more in principal and interest than they have received in new loans every year since 1983, In 1986 this ‘reverse transfer’ was estimated at 29 billion dollars, bringing the total of such transfers since 1983 to 82 billion dollars. Despite these transfers, the total indebtedness of developing countries has continued to grow — not because of any voluntary new lending but because of unavoidable reschedulings and the addition of unpaid interest to the principal outstanding. The Third World debtor is verily the Sisyphus of the modern world, but with two differences from the hero of antiquity. Each time his block of marble rolls back to the bottom of the hill, Sisyphus finds that it has become heavier.