Arguing that the benefits from borrowing abroad exceed the costs recently imposed on countries through debt-servicing difficulties, this paper defines debt as an engine of growth, forcing the borrower to produce goods efficiently, export them, and function competitively in the international market. Debt-servicing difficulties of developing nations have a complex history and the assessment of the 1986 conditions seems no less complicated. Countries continue to gain access to foreign resources even as recent growth trends and long term borrowing plans cause problems. U.S. Treasury Secretary James Baker's contribution to the lending and debt management processes continues as does the discussion of direct U.S. investment in developing countries. Developing nations must reduce the growth of debt relative to the rise in exports and economic creditor confidence is crucial in managing the external debt over the long term. External debt and foreign borrowing cannot be regarded as foes of the development process if foreign resources are considered as important contributions to the growth of developing nations. Instead, mismanagement of external borrowing and debt is the problem, stemming primarily from poor overall management of the economy. The future will likely present a continued shortage of external assistance measured against the investment needs of development. Successful policy making for development will include the effective management of foreign borrowing and external debt. (GEA)