ABSTRACT
The additional factor to weigh in the outlook is that new capital flows are very difficult to mobilize. Although the external financing needs of Latin America have for shrunk sharply, the availability of external finance has fallen even more. This chapter aims to update what has happened since the fall of 1982, when the financial world awoke to the possible consequences of the inability of Mexico to meet the principal repayments on its external public and private debt. It looks at the present status of the refinancings and of the debtor economies, and what the prospects for the future appear to be. The debt problem of developing countries is largely a Latin American one. In 1983 the interest payments on the external debt of the Latin American and Caribbean countries are expected to be close to US$40 billion, as long as international short-term interest rates do not increase above their level at midyear.
