Letter: IMF and debt policy

Nigel Wilkins
Thursday 01 January 1998 19:02 EST
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Sir: In her determination to castigate the rich countries for their "immoral" debt policies (Comment, 31 December), Diane Coyle seems to have forgotten that, during the 1980s, more than a half of the Third World's debts owed to the commercial banks were written off as losses.

Because of concerns that this process could in turn undermine the international financial system, much of the energy of the IMF at that time was devoted to arranging rescue packages for the most heavily indebted developing countries.

Since South Korea currently appears to be experiencing a liquidity problem rather than a fundamental imbalance in its external accounts, the IMF is correct in seeking to prevent a financial collapse that could have a domino effect on other Asian countries.

NIGEL WILKINS

London SW7

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