Swapping Developing Country Debt

Although numerous proposals have been put forward for alleviating the debt problems faced by developing countries, policy has, in practice, concentrated on a combination of rescheduling and economic adjustment within debtor countries. In recent years, however, a number of countries have begun to devise and operate various schemes for converting or swapping their external, foreign currency denominated debt, into domestic debt or equity. The most publicised scheme has been operated by Chile since mid-1985, but similar arrangements have also operated in Mexico, Brazil, Argentina, Turkey, the Philippines and Nigeria.