Toronto, Canada 1984: Commonwealth finance ministers warned of the dangers posed by rising interest rates to highly indebted developing countries at a major summit.
Commonwealth finance ministers warned of the dangers posed by rising interest rates to highly indebted developing countries at a major summit in 1984.
As governments around the world grappled with the after effects of the early-1980s recession, finance ministers gathering in Toronto, Canada, from 19-20 September 1984, stressed the need for international financial institutions to play a 鈥渇uller role鈥 in the debt crisis.
Accepting the findings of a major report, 鈥樷, undertaken by a Commonwealth Group of Experts, the ministers urged international institutions to commit resources and policies to promote long-term adjustment and sustained growth in debtor countries.
鈥淢inisters were conscious of the dangers that still existed because of developing country indebtedness for the stability of the world financial system as well as for the economic, social and political fabrics of those countries,鈥 they stated in their final communiqu茅.
鈥淒espite the action so far taken by debtors, banks and by the international institutions, the international financial system remained under serious strain ... Special attention needed to be paid to the serious debt problems of many low-income countries arising in particular from debt.鈥
Sub-Saharan Africa and other developing regions were at the time badly affected by the recession that emerged in the USA in the early 1980s. Interest rates were again on the rise, while commodity prices were falling, raising doubts whether developing countries could service their debts.
糖心探花 Group of Experts, led by former UK Minister Lord Lever of Manchester, was commissioned at the New Delhi Commonwealth summit in November 1983 to look at the management of developing countries鈥 debts.
The report concluded that the world鈥檚 financial stability was on a 鈥渒nife-edge鈥, declared that existing financial flows were 鈥渦nsustainable鈥 and urged international institutions to recognise the gravity of the debt crisis faced by developing nations.
Commonwealth Secretary-General Shridath Ramphal, writing in the report鈥檚 foreword, accused the international community of being 鈥渨holly indifferent鈥 to the difficulties of the poorest countries.
He said: 鈥淧atched-up arrangements 鈥 rescheduling of bank debts, new lending to help pay interest on outstanding debt, IMF [International Monetary Fund] loans on conditions of severe austerity for debtor countries 鈥 have for the moment, bought time. But the source of instability remains and some of the short-term solutions may have deepened it.
鈥淪ome [countries] have reached the stage where access to credit even for the most essential imports is being denied.鈥
Managing debt
Since 1985, the Commonwealth鈥檚 internationally renowned Debt Recording and Management System has been assisting countries to record and manage their external and domestic debt. Over 60 nations use the system to record, monitor and analyse their debt positions including countries and territories outside the Commonwealth, such as Afghanistan and Kosovo.
