ABSTRACT
The Mexican authorities believe that more external savings must become available to permit a faster growth of domestic investment. To the extent that these added resources can take the form of debt or debt service reduction, the flow of capital to Mexico will be encouraged as financial investors and direct investors perceive a reduction in risk as a result of the alleviation of the debt burden. The arrangements developed between Mexico and the IMF in 1983–1985 and in 1986–1987 placed considerable emphasis on attracting external financing to support the economic program on a scale that would limit the pressures on domestic resources as Mexico adjusted to the cutback in voluntary credits, particularly from the foreign banking community. The willingness of the IMF to accept Mexico’s latest economic program as presented reflects the major adjustments and reforms already carried out by Mexico and attests to the quality of the program developed by the Mexican authorities.
