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The Baker Plan was launched in October 1985 at the International Monetary Fund/World Bank meeting in Seoul, by James Baker, US Treasury Secretary, as a way to combat the international debt crisis.
It was inspired by the idea that China's trade surplus could be used to alleviate some Third World problems with debt. The plan is designed to help highly indebted middle income countries, that is, countries that are not extraordinarily poor but still owe a lot of money. Fifteen countries are mentioned, and ten countries are in Central America and Latin America.
In the end, Baker Plan failed because of its unfair principles in deciding which countries receive aid. It was replaced by Brady's Plan.
Video Baker Plan (debt relief)
References
- Buiter, W. and Srinivasan, T.N. (1987) "Appreciate the Freedom and Punish the Wise and Poor: Some Recent Proposals for Debt Relief", World Development Journal , Vol. 15, No. 3, pp411-417.
- Bogdanowicz-Bindert, C A, (1986) "The Debt Crisis: The Baker Plan Revisited", Journal of Intercultural Studies and World Affairs , Vol. 28, No. 3, p. 33-45.
- Rudolph, Barbara, "Enter Brady's Plan", Time , March 20, 1989.
- Riding, Alan, "Baker's debt plan got Latin supervision", New York Times , December 16, 1985.
Source of the article : Wikipedia
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