... about 150 percent of a country's exports" (2001:4). Similarly, in general, the ratio of the net present value of external debt to GDP of 50%, is regarded as sustainable over the long run. However, when fiscal sustainability is discussed, the aggregate public sector debt, both domestic and external, should be considered. An economy is said to have achieved fiscal sustainability "...when the ratio of public debt to GDP is stationary, and consistent with the overall demand -both domestic and foreign- for government securities" (Edwards 2002:3). A concept closely related to the debt sustainability issue is the "primary balance", which is expected to be compatible with a stable debt-to-GNP ratio. Primary balance is obtained by deducting government expenditures (excluding interest payments) from government revenues. Also highly significant is the concept of operational deficit, which is obtained by adding the real interest burden of the government on to the primary balance. In this report ...

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