Yet without it, banks and heavily indebted countries are headed for collision.

The Uganda deal should encourage other poor, highly indebted countries.

As a result, Japan is the world's most indebted country, with public debt recently estimated at 130 percent of the gross national product.

Consider the 700 million people living in the 41 poorest, most indebted countries.

And then the indebted countries can devalue their way back to being competitive.

But overall, "1987 must go down as another difficult year for the highly indebted countries," it said.

The impact of the credit famine on indebted countries was secondary.

On average, the heavily indebted countries grew only 2.3 percent in 1987, with per capita growth flat, if not negative.

Per capita income in the most highly indebted countries has declined practically every year since 1980.

A 1 percent rise in rates adds roughly $3 billion to the annual interest bill of the 17 most highly indebted countries, he reported.