What policies can developed to resolve debt problem, Business Economics

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What policies can less developed countries follow to resolve their debt problem?

Highly indebted countries can resolve by less developed countries:

  • Seek help by international agencies for example International Monetary Fund /World Bank Highly Indebted Poor Countries initiative. Less developed countries are needed to show good governance, implement economic reforms, include civil society and meet targets conditionality
  • Effort macroeconomic stability from balancing government budgets and tight monetary policy. The resultant decrease in inflation enhances competitiveness, reduces present account deficits and assists earn foreign currency for interest payments
  • Reschedule debt repayments for example temporary suspension or longer era of repayment
  • Default that is declined to carry on paying debt.

 


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