Review by Choice Review
Carvounis (St. Johns University) reviews the debt-servicing problems of developing countries, focusing on the experience of nine cases, mainly in Latin America. He stresses the adverse impact on the development prospects of these countries resulting from the adjustment policies that they have been required to pursue. Carvounis criticizes the current austerity-oriented approach to restoring orderly debt-servicing, maintaining that this emphasis is leading to severe economic, political, and social problems within these countries. He argues that the economic capacity and political will of borrowing countries to continue this route is dissipating. Carvanis concludes that a preferable alternative to dealing with the debt-servicing problem is to provide borrowing countries with reimbursable interest capping to protect them from high and unpredictable real rates of interest and to provide these countries official guarantees on new loans/investment as a means of channeling fresh external capital. The author's critique of IMF policies and the benefits of interest capitalization are overstated. IMF Conditionality ed. by John Williamson (1983) treats this subject more analytically and in better perspective, and William R. Cline's International Debt: Systemic Risk and Policy Response (1984) provides a more analytic and balanced assessment of the debt problem. Bibliography is heavily skewed to (popular) financial periodicals rather than professional journals and literature. Academic and public library collections.-C.J. Siegman, Federal Reserve Board
Copyright American Library Association, used with permission.
Review by Choice Review
