Decline in export credits

The growth of developing country exports has necessitated the extension of credit to their foreign customers, including developed countries. Export credit agencies have encouraged short-term credits, particularly to the countries which did not experience debt-servicing difficulties or which did have payments problems but were implementing adjustment programmes. As a result, total outstanding officially-supported export credits rose by $7.8 billion in 1985 compared with $3 billion in 1983. Export credits with longer maturities continued on a downward trend throughout the first half of the 1980s, and collapsed in 1985 to a net $1.9 billion, or less than half the previous year's level. The amount of credit thus provided by developing countries to developed countries in connection with exports on deferred-payments terms may be such as to impose a heavy strain on the balance of payments position of the developing country.