Improving economic performance of debtor countries

Improved economic performance could be achieved by: (a) reducing net resource transfers from developing countries to the rest of the world; (b) improved policies in industrial countries leading to lower real interest rates and improve trading prospects for the highly indebted developing countries; (c) sound, restructured economic policies in the developing world which would enhance the creditworthiness of the highly indebted countries and help them to attract new capital. Concerted action in all three areas provides the best chance to avoid a worldwide economic downturn and to return developing countries to a level of growth comparable with that of the 1950s and 1960s. The most highly indebted, middle-income countries need to find new financial options, including ways to pass on current market discounts on debt to the debtor countries under case by case, market-based approaches. For the debt-distressed, low-income countries of Sub-Saharan Africa, proposals to ease their debt burdens by official support need careful consideration. Developing countries can still do much to influence their own economic prospects, regardless of the international economic environment. This is true especially in the area of public finance.