Malawi- Debt and Aid Mexico-

Malawi-Debt And Aid Location- Southern Africa, east of Zambia. Landlocked Malawi ranks among the world's least developed countries. The economy is predominately agricultural, with about 90% of the population living in rural areas. Agriculture accounted for nearly 40% of GDP and 88% of export revenues in 2001. The performance of the tobacco sector is key to short-term growth as tobacco accounts for over 50% of exports.

Level Of Debt – Aid For Malawi – Malawi was approved for relief under the Heavily Indebted Poor Countries (HIPC) program. The government faces strong challenges, including developing a market economy, improving educational facilities, facing up to environmental problems, dealing with the rapidly growing problem of HIV/AIDS, and satisfying foreign donors that fiscal discipline is being tightened. In 2005, the anticorruption campaign championed by President MUTHARIKA may help encourage investment and economic growth. Aid For Malawi – Malawi owes $2,608 million, of which $1603 million is to the World Bank, $322 million to the African Development Bank, and $294 million to Japan. Other large creditors are the European Union ($95 mn), the IMF ($88 mn), IFAD ($50 million), China ($36 mn) and British commercial creditors ($27 mn). Malawi is unusual in that most of its debt is to the World Bank, and virtually all of its Paris Club debt was taken on after the cut-off date of June 1982. Normally bilateral loans taken after that time are not considered for cancellation. But Japanese aid (ODA) loans account for 86% of all of Malawi's Paris Club bilateral debt, so Japan's views carry substantial weight in negotiations. Japan has agreed to cancel all of its debt, and not to collect any debt service payments between now and the completion point (probably in 2003).

Mexico – Debt And Aid Location- Middle America, bordering the Caribbean Sea and the Gulf of Mexico, between Belize and the US and bordering the North Pacific Ocean, between Guatemala and the US. Mexico has a free market economy that recently entered the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports.

Mexico’s Debt Problems- By the early 1990s, Mexico's debt crisis had largely passed, although the country remained saddled with huge debts. Capital inflows were more than sufficient to service the debt through 1993 as portfolio and foreign direct investment reached unprecedented levels in response to liberalization and the successful negotiation of NAFTA. Despite the use of funds from privatization to retire old public-sector debt, total external debt continued to grow during the early 1990s as current account deficits soared after 1992. After reaching a low of US$112 billion in 1992, Mexico's total external debt rose steadily thereafter, reaching an estimated US$158 billion in 1995. The large increase during 1995 in Mexico's total public indebtedness resulted in part from loans contracted in the wake of the new peso collapse of late 1994. In early 1995, the United States government made US$20 billion available to Mexico from the United States treasury department's Exchange Stabilization Fund, the Bank for International Settlements contributed US$10 billion, and the IMF offered US$8 billion in standby credit and US$10 billion of other funding. In 1993 Mexico's total debt service amounted to US$21 billion, including US$14 billion in principal payments and US$7 billion in interest payments. Mexico's total external debt amounted to 356 percent of GDP in 1993.