expense of much needed domestic investment and imports of capital goods. Even more serious, investment on education and on social services such as health and housing has had to be reduced. The magnitude of the debt keeps mounting year after year and debt ratios keep rising, owing to frequent rescheduling, high interest rates and currency fluctuations. If today the total external debt of developing countries stands at $1.3 trillion, it is not because these countries have in fact received all this colossal sum. Much of it arises from high interest rates and exchange rate instability. This constitutes a severe constraint on the growth potential of developing countries and is an indictment against the strategies followed so far. The international community crossed a significant psychological hurdle when it recognized that debt reduction should be an integral element in any strategy for solving the debt problem. However, implementation of this policy under the so-called Brady Plan gives us little ground for hope because difficult conditionalities must be met which make negotiations long and arduous. So far only one country has concluded an agreement under the Plan's guidelines, and even then it is expected that that country's external debt position will remain unchanged at JVM/2 A/S-18/PV.4 5 (Mr. Obed Asamoah, Ghana) the end of 1992. Debt owed to the multilateral financial institutions represents a burden that must also be alleviated. An important external constraint is the flow of resources for development. I referred a short while ago to the magnitude of the external debt of developing countries. As total debt grew, so did debt-service burdens. Debt servicing, transfers on foreign direct investment and other payments have led to the phenomenon of net transfer of resources from developing to developed countries. The value of these transfers is in the order of over $30 billion yearly, and the 
**Analysis**
The text primarily discusses the economic challenges faced by developing countries, specifically the issue of external debt and its impact on their growth potential. The author highlights the difficulties in implementing debt reduction strategies and the burden of debt servicing on these countries. The text also touches on the issue of resource flow from developing to developed countries. Given these themes, it is likely that the text belongs to the category of economic development.

**Category**
Economic development, International trade