Endorsing permanent foreign debt settlement

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.

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.