Defaults on international loans
Other Names: Debt repudiation
Arrears in international debt payments
Nature: Defaults on international loans may take several forms: repudiation of old loans by new governments swept into power during economic crises; failure to earn or unwillingness to expend foreign exchange to effect the transfer despite the fact the revenues are available in the domestic currency; and failure to collect sufficient revenues to cover debt service even when current expenditures have been drastically reduced (namely bankruptcy of the borrower).
Incidence: It is estimated that by the end of 1990 15 developing countries will owe about $524 billion to banks and governments, with nearly another $50 billion in interest payments falling due.
Problem Type: D: Detailed problems
Date of last update 01.01.2000 – 00:00 CET