>From: Sabri Oncu <[EMAIL PROTECTED]>
>Reply-To: [EMAIL PROTECTED]
>To: PEN-L <[EMAIL PROTECTED]>, ALIST <[EMAIL PROTECTED]>
>Subject: [PEN-L:30749] Brazil's Debt Menaces U.S. Markets
>Date: Mon, 30 Sep 2002 18:01:17 -0700
>
>Brazil's Debt Menaces U.S. Markets
It's important to keep in mind that although the pubilc debt/GDP ratio is
most often mentioned, public debt service/Govt. Income seems to me to be
most important. El Salvador's dept. as a portion of GDB is under 50% (and
over 40%) _but_ annual debt service is 72% of annual taxes (and over 50% of
total income). High debt service leads to low public investment thus less
education, health, infrastructure etc.. If these standards drop it can
cause significant social unrest as Argentina showed once draconian measures
were taken to continue servicing the debt (public employee salary cuts,
firings etc.). The same goes for military spending in Latin America. It
might be lower as a percentage of GDP than in many other places, but still
high as a part of the budget relative to social needs.
>(Published in the October issue of Bloomberg Markets.)
-Frank G.
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