BRADY BONDS AS A WAY TO FIND A SOLUTION TO A DEBT CRISIS OF DEVELOPING COUNTRIES

Abstract

The Brady plan didn’t eliminate problem of the foreign debt burden of developing countries, but this debt relief helped them to restore investment and growth and to become a reliable debtor, that resulted in increase of capital flows to all parties – debtor-countries and creditor-countries. The external debt burden should be further reduced – especially the debt of the low-income countries. It’s necessary not only for the sake of the debtors, but also for the sake of the creditors, who have an important long-run stake in allowing the developing
countries to surmount the current crisis and to avoid them in the future.