Experience with the Rescheduling of International Debt

Abstract

The wording of the topic itself suggests as the most convenient approach to choose the case of a specific country for demonstration. Much to the regret of international banks there is no great lack of debt reschedulings for sovereign debtors from which to select. The first three years after the Second World War saw relatively few cases: to begin with the settlement of old German debt by the Federal Republic of Germany in the early 1950s. There was a debt rescheduling for Turkey at the end of the 1950s and another, quite substantial one for Indonesia in the second half of the 1960s. It was only from the mid-1970s onwards, when developing countries increasingly felt the consequences of oil price increases coupled with insufficient or slow adjustment to changed economic conditions, that debt reschedulings became more frequent.