debts. At the start: of 1989, develop~nq countries' total debt stood at $1.3 trill ion. That fiqure represents nearly twice our annual export earninqs. At that level, annual interest obliqations run at about 9100 billion. While it is often said that a debt-servicinq ratio of not more than 25 per cent of a countrv 's export earninqs is nore manageable, developinq countries' debt-servicinq obliqations averaged about 40 per cent in 1989, and may qo hiqher in the next decade. At the same time, since 1983, developinq countries have suffered a perverse net transfer of financial resources to developed countries and i "') JB/19 A/S-18/PV. 5 83 (Mr. Shamuyarira, Zimbabwe) multilateral financial institutions. In 1988 alone, that amounted to $32.5 billion, with a cumulative total of $115 billion from 1983 to 1988. These twin problems are an economic threat to developinq countries, but they are also a challenge to the world economic system as a whole. Although there have been sone commendable attempts to address these twin problems, it is clear that these have been mere palliatives. The orthodox prescriptions of devaluation of currencies, reduction of budget deficits, liberalization of trade and privatization of State-owned enterprises d:> not remove the threat or the challenges. The day of reckoning is now at hand. Debt-reduction schemes, as envisaged in the Brady plan, have not been successful. It has only been implemented in Mexico, and the results we have seen about its implementation there have not been all that successful or encouraging. What is clear, however, is that all countries and all Governments must take effective financial and economic action to remove the huqe debts in order to protect the existing international economic system itself. The threat and the challenqe to the international economic system does not face developing countries 
**Analysis**
The text discusses the economic situation of developing countries, specifically their debt crisis, and its impact on the international economic system. It highlights the severity of the debt burden, the challenges it poses, and the need for effective financial and economic action to address it. The text also touches on the failed attempts to address the debt crisis, such as the Brady plan.

**Category**
Economic development, International trade