<P> The Baker Plan was launched in October 1985 at the International Monetary Fund / World Bank meeting in Seoul, by James Baker, United States Secretary of the Treasury, as a way to combat the international debt crisis . </P> <P> It was inspired by the idea that China's trade surplus could be used to relieve some of the Third World's problems with debt . The Plan was designed to help highly indebted middle - income countries, i.e., those countries that are not incredibly poor but nevertheless owe a large amount of money . Fifteen countries were mentioned, and ten of those were in Central and Latin America . </P> <P> Ultimately, the Baker Plan failed due to its inequitable principles on deciding which countries received aid . It was succeeded by the Brady Plan . </P>

The baker plan for addressing the debt crisis was based on the assumption that