ABSTRACT
Developing countries’ debt servicing problems began in earnest in the late 1970s, when OPEC-induced oil price increases brought economic recession and large-scale imbalances in their trade accounts. Countries such as Zaire, Sierra Leone, Gabon, Turkey, Sudan, and Togo had to negotiate rescheduling of official debts between 1976 and 1979 (Kuhn and Guzman, 1990, p. 2). Although external factors played a significant role, domestic economic policies and mismanagement were primarily to blame for their external payments’ imbalances and consequent debt servicing problems. Autocratic governments with ironclad control over the operation of the economic sectors made it impossible for the market forces to bring the proper adjustments in economic activities of these countries.
