Ecuador Says Clinton Vows Support
Aug. 25, 1999
QUITO, Ecuador (AP) _ President Bill Clinton has pledged support for Ecuador's efforts to restructure its $13 billion foreign debt and negotiate an interim loan agreement with the International Monetary Fund, Ecuador's Foreign Ministry said Wednesday.
``I praise your efforts to reach agreement with the IMF and I encourage you to continue working toward that end,'' Clinton said in letter received Friday, according to a Spanish-language news release. ``The United States is committed to helping developing nations to achieve sustainable economic growth, which includes a manageable level of foreign debt.''
An IMF mission is in Ecuador this week negotiating a $400 million loan to help tied over this small South American nation during its worst economic crisis in 70 years.
Obtaining the loan would free up additional economic assistance from international lenders.
Meanwhile, Ministry of Finance officials hope to restructure $6 billion of Brady bond debt, as a $98 million interest payment comes due Aug. 31.
Brady bonds, named for former U.S. Treasury Secretary Nicholas Brady, allowed 18 countries over the past 10 years to repay their debt by repackaging defaulted loans into new bonds traded on the international market.
Ecuador caused market instability throughout the region last week when it hinted it might seek deferral of the $98 million payment.
Those fears abated this week when Minister of Finance Ana Lucia Armijo said that Ecuador would instead propose a ``coordinated restructuring'' of it Brady debt.
Ecuador's total foreign debt of $13 billion is expected to total 117 percent of its gross domestic product by year's end.
This nation, with a population of 12 million people, is struggling 55 percent inflation, 16 percent unemployment and a $1.7 billion budget deficit that has swelled to 7 percent of its gross domestic product.