ABSTRACT
During the second half of the 1990s, huge amounts of the debts owed to creditor banks were reduced through such traditional debt relief approaches as debt buybacks, debt-equity swaps, and debt-for-development swaps. Besides, debt rescheduling agreements designed to convert short-term debts to long-term debts at interest rates ranging from 2 to 4 per cent provided some degree of relief to many financially distressed debtor nations. In late 1995, the World Bank and the International Monetary Fund (IMF) conceded that the excessive debts owed to them by some poor countries needed to be written off in order to save the economies of such countries from further decay and backwardness. Many development economists have recognized this fact, arguing that a large overall population can, among other things, increase the potential size of a country's domestic market to a level that is economically favorable to an expansion in both local and foreign investment.
