Debt Plan

I take exception to your view (“Brady’s Debt Proposal,” editorial, March 13) that Treasury Secretary Nicholas Brady’s “proposals for resolving the Third World debt are, at best, a disappointment.” I think they are conceptually correct, i.e., reducing the debt, despite the fact that details are not spelled out. Engaging the International Monetary Fund and the World Bank would spread the burden internationally. Japan could pick up the loss of funds from the IMF and World Bank. Moreover, the proposal provides incentives for the commercial banks to share some of the burden and for the Third World countries to tighten their belts. It follows that all parties concerned would assume some of the burden.

Other alternative approaches, which have been tried since the ‘60s, have done nothing more than to add more interest burden and postpone the day of reckoning resulting in political upheaval.

Brady’s proposals could lend themselves to a fundamental remedy and save many of the Third World countries from sociopolitical explosions.


Department of Economics