The Political Dimensions of Military Spending and Debt Service in Southeast Asia
Although the imperatives of external debt service have led to a reduction in the size of defence budgets in most Third World countries, the impact of military spending cannot be understood separately from the political attractiveness of external borrowing in the 1970s. While the cumulative impact of defence expend itures has been to worsen Third World borrowers' debt levels and hamper their debt servicing efforts, this is of secondary importance compared to the low political capacity of many debtor governments to mobilize and redirect the human and material resources under their nominal control towards that end. Many Third World countries used much of the borrowed capital to fin ance current budget deficits, government consumption and arms imports. Generally, the four major Southeast Asian borrowers ? Indonesia, Malaysia, the Philippines and Thailand ? did not use foreign capital to finance their budget deficits, but appear to have invested some borrowed funds in domestic defence indus tries. One result is an apparent arms import-substitution effect: their arms imports actually declined as a percentage of total imports even as their external debt increased. Thus, their arms imports do not impair their debt service performance the way they have worsened the debt service problems of heavily indebted Third World countries elsewhere.
The Political Performance of Governments, External Debt Service, and Domestic Political Violence
This paper identifies some of the political mechanisms that help to explain why the relationship between IMF-supported stabilization programs and other economic adjustments related to the problems of external debt service and political violence are, at best, indirect. A cross-sectional pooled time series (35 Third World countries, 1974-86) is used to test the proposition that low political capacity indirectly increases frequency of protest demonstrations, political strikes and riots when governments attempt to adjust to rising debt service costs without disturbing the political status quo. The data analysis supports the proposition. The burden of external debt service does not directly affect these forms of political violence. Prior IMF-supported stabilization programs have a coincidental impact on increasing domestic political strife to the extent that weak governments use IMF conditionality to justify introducing austerity measures they would have to implement with or without IMF assistance.
The Latin American Debt
Part 1 General issues of Latin America - debt, foreign investment and economic development: the external debt and the economic development of Latin America, A. Jorge and J. Salazar-Carrillo new direction of foreign investment in developing countries, F. Pazos reflections on the macro-economy of Latin American development, G. Ranis and F. Altshul Latin America - the revival of growth and the world bank, C.N. Quijano. Part 2 Issues of Latin American debt relief - proposals and controversies: real alternatives for handling the Latin American debt problem, P.A. Palma Latin American debt-equity swaps, A.M. Parhizgari credit securitization and developing countries' debt, W.O. Bascom how to assess the market value of developing country loans - the case of Latin America, M. Lasaga external debt, unilateral transfers and kleptocracy in Latin America, M. Mamalakis. Part 3 Issues of Central America and the Dominican Republic - debt, economic policy and the new political order: recent developments in the Central American debt crisis, R. Moncarz economic policy in the Dominican Republic since 1966, D. Worrell new perspectives for modernization in Central America, G. Irwin.