Problem
Deteriorating terms of international financial loans to vulnerable countries
Other Names:
Deterioration in the cost of external national financeIncreases in interest rates on long-term debts to countries
Inappropriate loans available to countries
Unreliable forms of concessional and non-concessional lending to countries
Decreasing availability of concessional financial resources
Nature:
This results in dramatic shifts in the debt structure from concessional loans to non-concessional loans with harder lending terms. Developing countries, in particular, are exposed to deteriorating terms of borrowing, including sudden increases in interest rates paid on long-term debts, particularly commercial loans. In addition grace and repayment periods may be reduced.
Broader Problems:
Limited availability of loansDeterioration in external financial position of countriesIncompatibility of long-term thinking and financial prioritiesRestrictive conditions on loans through intergovernmental facilities Narrower Problems:
Inconsiderate choice of payment times by creditorsRescheduling foreign debts at market-related interest ratesUncertainty of development programmes due to short-term loansUncertainty of development expenditures due to floating-rate loans Aggravates:
Burden of servicing foreign public debtReallocation of aid funds to alternative priorities Strategies:
Providing loans for urban developmentProviding low-interest loansProviding loans for communicationsProviding loans to fisheriesProviding loans for the environmentProviding loans to the transportation sectorProviding loans to agricultureProviding loans for planning and reformProviding preinvestment loansProviding loans for educationProviding loans to industry/miningProviding loans for tourismProviding loans for export financingProviding loans for national institutional changeUsing overseas development aid to reduce international migrationStudying economic reformProviding loans Subject(s):
Commerce → CreditCommerce → Finance
Commerce → Purchasing, supplying
Research, Standards → Quality unification
Societal Problems → Vulnerability
Society → Foreign
Related UN Sustainable Development Goals:
Problem Type:
E: Emanations of other problems Date of last update
04.10.2020 – 22:48 CEST