IMF Says Debtor Nations’ Exports Too Little to Pay

Heavily indebted countries are having trouble making the foreign sales that they need to pay their debts to the United States and other countries, according to figures made available Monday by the International Monetary Fund.

Debtors must pay interest in dollars or other hard currencies, since the lending comes largely from banks in the United States, Canada, Britain, West Germany and Japan. The chief way that debtors get the money to pay is by selling their products to richer countries or by borrowing more from them.

They also hold down their imports in order to cut the outflow of their hard currency, a policy that hits jobs and business in the industrial countries. The less the debtor countries can buy, the less the United States and others can sell to them.

Imports Declined

The fund’s IMF Memorandum, which appears once a month, noted that, for the first half of this year, the exports of Brazil dropped to $6.5 billion from $7 billion for the first half of 1984. That was a decline of 7.4%. With $103 billion of foreign debt, Brazil heads the list of developing countries in the red.

Imports by many of the debtor countries were also down.

Brazil cut its foreign purchases from $24.9 billion in 1980 to $15.2 billion last year, and it made another small cut in the first three months of 1985--to $3.37 billion from $3.44 billion.

Chile showed a decline of 4.5% in its foreign sales to $946 million from $951 million. Of six countries reporting for the period in the Latin American area, only Ecuador had an increase.

In the Far East, the Philippines showed a drop in exports to $2.3 billion from $2.5 billion in the first six months of 1984.

Mexico, the developing country with the second-largest debt, has only reported for the first quarter of this year. For those three months, it exported $5.7 billion worth of goods, a sharp drop from the $6.5 billion of the year before.

Decline in Exports

For Argentina, the most recent figures are for the last three months of 1984. They report a decline in exports to $1.4 billion from $1.7 billion at the end of 1983.

International bankers are mulling over the proposal of Treasury Secretary James A. Baker III that they lend another $20 billion over the next three years in an attempt to strengthen the debtors. The World Bank estimates that total debt of poor countries is nearing $1 trillion.

New bank lending has dried up in the last couple of years, but debtor countries are getting some “involuntary” loans under pressure from governments and international bodies, which still make loans themselves. In some countries, back interest on old loans is also piling up.