ABSTRACT
The international indebtedness of sovereign countries is not a new phenomenon. However, the debt crisis, which is made up of bilateral debt, multi-lateral debt and commercial debt, of the 1980s and 1990s is much larger, with greater implications, than earlier foreign debts. The debt and the resultant structural adjustment programmes accelerate the forces driving deforestation and other forms of environmental destruction in several obvious and other more subtle ways. The principal way of dealing with commercial debt appeared in 1989 when the USA announced a new initiative aimed at tackling the problem. Multilateral debt, as a percentage of total debt share, is rapidly growing. Interest payments on long-term debt to multilateral creditors increased by 30 per cent during 1987-1993, while combined interest and principal payments increased by 60 per cent. Bilateral debt currently accounts for around 61 per cent of total debt stock for the 32 severely indebted, low-income countries.
