The debt trap and how to escape it: developing country debts.
Economist (US), The, May, 1995
Huge debt loads are crippling the economy of several developing countries. African countries alone owed more than $230 billion in 1993. The World Bank should look at lending rules that allow countries to fall into so much debt.
IF YOU take out a map of Africa and look on the left-hand side, just below where the continent bulges most, you will find a small country called Guinea-Bissau (population 1m). There is little remarkable about the country--like many countries in Africa it is very poor--except its indebtedness. The value of the country's outstanding debt amounts to a horrendous 1,105% of its exports (which are mostly cashew nuts).
As a rule of thumb any country with outstanding debt worth more than 200% of the present value of its exports is in trouble. This...
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