The Baker Plan : progress, shortcomings, and future
The Baker Plan essentially made existing strategy on the debt problem more concrete. Like existing policy, it rejected a bankruptcy approach to the problem. It assumed that the principal debtor countries could grow their way out of the debt problem and could expand their exports enough over time to reduce their debt burden to normal levels. It called for structural reform, and it continued the adjustment efforts in the debtor country in return for financial support from foreign official and bank creditors. The plan did shift emphasis, however: from short-term balance of payments stabilization to longer-term development objectives, and thus from the IMF to the World Bank as the lead institution in debt management. The basic international debt strategy remains valid, but intensified policy efforts are necessary. Banks should provide multiyear new money packages, exit bonds should be guaranteed to allow voluntary debt reduction by banks, and net capital flows to the highly indebted countries should be raised 15 billion dollars a year. Successful emergence from the debt crisis, however, will depend primarily on sound economic policies in the debtor countries themselves.
|Date of creation:||31 Aug 1989|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:250. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.