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THIRD WORLD LEADERS URGE LENIENCY FOR DEBTOR NATIONS
Home > Journalism >Politics

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By Elizabeth Pisani
500 words
3 June 1990
Reuters News
(c) 1990 Reuters Limited

KUALA LUMPUR, June 3, Reuter - Fifteen developing nations ended a summit on Sunday with a call for more money to be made available to poor nations to help them repay debts and a plea that those with arrears should not be punished.

Current measures to end the crushing debt problems of the Third World were also inadequate and needed to be enhanced, the Group of 15 (G-15) said in its final communique after a three-day meeting in the Malaysian capital Kuala Lumpur.

"This includes a positive approach, and not punitive measures, to the problem of arrears with multilateral financial institutions," it said.

The United States has suggested to the World Bank and International Monetary Fund that non-payers be punished.

The G-15 gathers leaders or senior ministers from Algeria, Argentina, Egypt, India, Indonesia, Jamaica, Malaysia, Mexico, Nigeria, Peru, Senegal, Venezuela, Yugoslavia and Zimbabwe.

The 15, which include some of the world's major debtors, owe about half the 1.3 trillion dollar Third World debt, an issue which has featured prominently in their inaugural meeting.

The group was formed after last September's Non-Aligned Movement summit in Belgrade and aims to forge economic cooperation among developing nations.

Malaysian Prime Minister Mahathir Mohamad told a news conference representatives of the 15 would meet soon to formulate "a common approach when dealing with the creditors".

"It is not our intention to avoid paying our debts but we must admit that the capacity to pay differs with different countries and the approaches have not been beneficial to everyone at the moment," he said.

He also said the 15 had endorsed three main projects to boost Third World cooperation.

These are a data exchange for trade and investment information, the use of central banks to guarantee bilateral trade payments, and a forum to bring together businessmen and officials from developing nations.

The G-15 urged rich nations to stabilise exchange rates, lower real interest rates, free up their markets and link a country's debt-servicing capacity to its economic performance.

"Substantial additional resources need to be provided to back debt reduction operations and support adjustment measures," the communique said.

But the cry for more funds was backed up by a promise that developing nations would carry out economic reforms to accelerate growth and development.

"We, on our part, are committed to undertake the necessary measures to mobilise domestic and attract foreign financial resources particularly direct investment and other non-debt creating flows," the communique said.

"We are abandoning the cry-baby approach to negotiations," one delegate said.

"Now we're saying "Hey, we have problems but let's work on them together'," he said.

The 15 leaders have agreed to meet annually, starting in the Venezuelan capital Caracas in June, 1991. A steering committee comprising the foreign ministers of Malaysia, Senegal and Venezuela has been set up to keep the link between G-15 members alive between meetings.

 

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