y pointed out, they were receiving hardly any new money anyway. The external debt issue had become highly politicized in Brazil, and politicians from all political spectrums were openly talking about both the illegality and the immorality of most of the country's external debt. Nevertheless, President Sarney's government resumed principal payments on the country's external debt about one year subsequent to the payment suspension (Pang, 1989, p. 127).
In its dealings with the developing countries, the IMF employs a protocol known as conditionality. Conditionality refers policies that member nations are expected to agree to implement and observe before a balance of payments loan is extended from any of the organization's special financing facilities. Agreeing to abide by these IMF developed conditions is also usually required by private sector lenders.
The nature of the conditions imposed by the IMF vary from case to case. Conditions, however, are expected to provide confidence that the borrowing member will overcome its balance of payments difficulties and be able to repurchase its currency without undue strain during the specified period. More often than not, conditions established by the IMF emphasize measures that affect the level and composition of demand within the borrowing nation's domestic economy. Additionally, conditions often have emphasized the creation of positive interest rates and the establishment of rational pricing for public services. Rational pricing refers to realistic, market value pricing. To most developing nation's, however, rational pricing is a euphemistic phrase meaning higher prices.
Complicating the stabilization problem in most developing nations is their massive external debt. Many analysts view the external debt as essential for continued development in the region; however, all recognize the complexity it has introduced into the stabilization efforts. The debt load of developing coun...