Endorsing permanent foreign debt settlement
Synonyms: Advocating "once-and-for-all" foreign debt settlement
Context: Many governments, implicitly or explicitly, recognize the need for measures to alleviate the debt burden as intermediate steps towards a durable solution to the debt crisis. The measures propose range from substantial debt reduction to debt cancellation of all categories of debt including commercial, bilateral and multilateral debts, as an alternative to repeated debt rescheduling.
Implementation: A proposal for once-and-for-all debt settlement was endorsed by the Ministerial Meeting of Non-Aligned Countries on debt and development, held in Jakarta in August 1994. The Meeting had called for a global reduction of an average of 70 per cent of the debt of developing countries. The meeting emphasized, however, that within this overall framework of once-and-for-all debt settlement, debt reduction for individual countries must be approached on a genuine case-by-case basis so that the most appropriate policies are adopted for each country.
Claim: In order to ensure that such a once-and-for-all debt settlement leads to the restoration of credit-worthiness of debtor countries and the achievement of a reasonable rate of economic growth, the final settlement of debt and net flows of financial resources on appropriate terms must be worked out as integral components of a comprehensive external financing package.
Type Classification: E: Emanations of other strategies