The 1980s opened with many developing countries facing debt-service payments that exceeded new loans, while the recession curtailed market opportunities in industrialised nations. The result was a serious balance-of-payments and debt crisis, along with a decline in real terms in per-capital income. Structural adjustments, i.e. a reduction in public spending and deregulation of economic policies, were implemented in an attempt to deal with the debt crisis.
In 1986, the Federal Council presented the third message on the continuation of economic and trade-policy measures to the Parliament. Taking the example of trade, the document went into considerable detail on the interdependence between industrial and developing countries. The preferred instruments remained mixed credits, balance-of-payments assistance, commodity and trade promotion and campaigns to support the use of private-sector funds for industrialisation. These were deployed either individually or combined with each other. Almost two-thirds of the funds were earmarked for mixed credits, invested in energy, telecommunications and industrial projects. The upper limit for recipient countries was raised from a per-capita income of USD 1,000 to 1,430.
The quality of the projects was secured through early participation in formulating the project, e.g. by means of technical missions as well as close contact with the recipient countries and with the Swiss industry. For the first time, specific projects were also assessed by private consultants through field studies or desk research. Such appraisals of achievement of objecives were used to draw lessons for the formulation of future projects.
As 1989 came to a close and the Berlin Wall came down, the Federal Council proposed a credit facility of 250 million francs to finance immediate aid for the former eastern-bloc countries.
Many developing countries continue to face serious (...) problems. Haunted by such difficulties, many of these countries are attempting to introduce reforms. However, without increased and active support from the international community of states, the chances of these much-needed reforms succeeding are (...) questionable. We must therefore support such countries’ own efforts – which are costly in both economic and social terms during the transition phase – by ensuring better underlying conditions and direct financial measures.
Message of 19 February 1986 on the continuation of economic and trade-policy measures