An inquiry into the debt of a nation: The international debt crisis and the case of the Bahamas

The study integrates the scattered ideas and opinions on the debt crisis at the macro (international) and micro (The Bahamas) levels in order to draw inferences to assist The Bahamas in avoiding the debt problems which have plagued neighbouring Caribbean and Latin American countries.; The study of the international debt crisis represents a content analysis research report and its scope includes (1) to determine its origins, (2) outline alternative solutions aimed at an auspicious resolution, (3) examine the role of the International Monetary Fund (IMF) and (4) describe the detrimental repercussions stemming from the unresolved debt crisis.; The study centred on the relationship between debtors, creditor banks, industrialized countries and multilateral financial organizations within the global financial system. Research reveals that debtors are bearing a disproportionate share of the burden of adjustment and a more cooperative effort is required to resolve the debt crisis. Based on the adverse impact of excessive foreign debt accumulation, the question of why countries resort to foreign capital is explored.; The national debt of The Bahamas over the period 1975-1991 is analyzed to identify trends, monitor overall growth and evaluate debt manageability indicators in order to provide constructive guidance to relevant government authorities, being cognizant of the heightened anxiety surrounding the augmentation of the national debt. The investigation and conclusions are based on both quantitative analysis of economic statistics and qualitative analysis of literature on the economic history of The Bahamas.; A study of the debt situation of The Bahamas concluded that over the short term, debt levels are manageable. However, a number of unfavourable economic trends were observed which threaten long-term debt manageability. Therefore, the government should evaluate its debt management strategy and undertake fiscal reforms to facilitate economic growth and development.* ftn*Originally published in DAI Vol. 58, No. 2. Reprinted here with corrected title.