Indicator systems for the assessment of the external debt situation of developing countries

The foreign indebtedness of the Third World has been increasing rapidly over the past ten years. The volume of private and public borrowings expanded between the end of 1970 and the end of 1979 from $ 64 bn to $ 376 bn1. This development has quickened the interest in methods for an assessment of the external debt situation of developing countries. Interested parties—commercial banks, international organizations, etc., and the borrowers themselves—are looking for criteria by reference to which they can monitor foreign indebtedness and ascertain in good time whether and when the foreign debt of a country is in danger of reaching “critical” dimensions. What view should be taken of the various criteria?