25 Latin Nations Weigh Strategy on Debt Repayment

Senior officials from 25 Latin American nations meet here beginning today to try to forge a common means of limiting repayment of the region’s $370 billion foreign debt.

At least 16 foreign ministers and five ministers holding economic portfolios are attending the two-day gathering under the auspices of the Latin American Economic System, a regional grouping. A leading item on the agenda is to decide which economic indicators should determine levels of debt repayment--export earnings, growth levels, world prices of raw materials or other criteria.

The aim is to adopt a joint stand to present to the United Nations, where the foreign debt issue is to be debated for the first time this year in the General Assembly, according to the meeting’s Peruvian organizers. Peru hopes the final communique will establish the principle that economic indicators should determine debt repayments for all members of the Latin American Economic System, or SELA, which range from Chile to Cuba.

“We want SELA to adopt a brief statement we can operate with . . . in the political dialogue at the United Nations,” said Oswaldo de Rivero, Peru’s undersecretary of economic affairs. “We are not aiming at lengthy declarations; there have been enough of those in Latin America.”

The principle of linking debt payments to economic criteria has gained momentum in Latin America in recent months. Peru is limiting debt-service payments to 10% of export earnings. Brazil said in July that it aims to cut interest payments to 2.5% of its gross domestic product instead of the current 3.8%. And Mexico last month negotiated a debt agreement under which banks will have to grant a $1.9-billion contingency fund if the price of crude oil falls below $9 a barrel or if economic growth or public investment slump.