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Brazilian External Debt: A Study in Capital Flows and Transfer of Resources

Published online by Cambridge University Press:  02 January 2018

Ramesh C. Garg
Ramesh C. Garg*
Affiliation:
School of Business Administration, Philadelphia College of Textiles and Science, Philadelphia, Pennsylvania 19144
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Extract

In recent years the problem of the external indebtedness of non-oil-exporting countries has gained significant weight in public discussion. With the quadrupling of oil prices since the end of 1973, a rapid increase in the borrowing of LDCs has occurred. The standard of living in these countries is extremely low to begin with; any further room for downward adjustment to offset higher cost of oil imports through a slowing down of economy is simply an unacceptable possibility. Moreover, any further economic restraint on the already slower pace of development would be politically unpopular for the leaders in developing countries. Consequently, many LDCs have resorted to increasing external borrowings to pay for the oil bill, as well as to maintain a minimum rate of economic growth. The total external public debt of these countries is now estimated at around $200 billion (U.S. Senate, 1977: 51). This paper examines the debt servicing experience of Brazil. Lately, Brazil has been the center of attention because it owes some $25-$30 billion to foreign creditors. Its debt servicing burden for 1977 would be approximately $5.3 billion, or 40% of an estimated $12 billion in export earnings.

Type
Research Article
Information
Journal of Interamerican Studies and World Affairs , Volume 20 , Issue 3 , August 1978 , pp. 341 - 351
Copyright
Copyright © University of Miami 1978

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References

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