ABSTRACT
Policies that have discouraged foreign equity investment have, indirectly, increased a country's reliance on foreign borrowing, which in turn, increases the debt service burden. This chapter explores the World Bank and indeed all multilateral development banks have considerable scope to build on their programs and resources. There is ample room to expand the World Bank's structural and sector adjustment lending and co-financing operations. From a developing country perspective, the reluctance of the banks to participate in new money and debt rescheduling packages has introduced serious uncertainties, in some cases making it more difficult for them to pursue economic reforms. A new international economic order means that there should be an order able to deal with conflicting economic interests. One aspect of the US debt initiative that has been given little emphasis is the essential need for industrialized countries to adopt and follow sound economic policies.
