Latin America seeks to renegotiate debts . Consensus grows that debts can't be repaid as currently structured

When the presidents of some of Latin America's major debtor countries converge here this week for the United Nations General Assembly, changing the terms of payment of their nations' debts will dominate their meetings. There is a growing consensus among Latin debtor countries, according to several Latin American ambassadors here, that the region's countries will not be able to maintain the present schedule or size of debt repayments.

One politically moderate ambassador echoed his colleagues' views when he said, ``The debt, as presently framed, is unpayable.''

It is only a matter of time, say these diplomats, until the Latin countries, collectively or individually, publicly or privately, make it clear to Western the banks that they cannot continue paying at present rates.

``When a country comes to a bank to pay back debts, it's no different from a private family: first the family has an obligation to see that the children don't starve and that it continues to exist as a unit. If it repays so much that it destroys itself, both it and the banks end up as losers,'' says another Latin American ambassador.

He went on to say that, ``The United States must realize that the debt problem is not just an accounting problem, it is a major economic and political one. It cannot be solved only through negotiations with the banks. It must be dealt with on a government-to-government basis because it is a problem which could affect the stability of the Western world.''

Top Latin American diplomats feel that the presence in New York of the presidents of Brazil, Peru, Venezuela, Uruguay, Panama, and the Dominican Republic will lead to discussions of the policy to be followed by the debtor countries on how to depart from the repayment schedule. Mexico's President canceled his trip because of the earthquake.

Latin American diplomats differ as to how long it will be before most of the debtor countries openly move to renegotiate their debt payments. Some senior diplomats say that the meetings at the UN this week and subsequent ones could lead to public declarations before the end of this year. Others say that it might take six to 12 months.

The consensus on the impossibility of keeping to the present schedule of debt repayment has been forming all year. Peru's move to pay no more than 10 percent of its export earnings as well as the significant shifts in the positions of two of the largest debtor nations, Mexico and Brazil, have reinforced this.

Although the International Monetary Fund (IMF) considered Mexico a model country because of its attempts to pay back its debts, the Mexican position has been undercut in the last few months, by a fall in the price of oil, Mexico's main export, and a new spate of domestic economic difficulties. Also the earthquake that caused severe damage in Mexico last week will probably force it to seek new loans.

Although Mexico negotiated a rescheduling of its debt with US and European banks earlier this year, given the changed circumstances, the renegotiated terms seem inadequate. Privately, Mexican officials express a growing willingness to explore with other Latin American administrations the possibility of departing from the present schedule of repayments.

US academic analysts also point to the fact that the Mexican Finance Minister Jes'us Silva Herzog Flores is a leading candidate to succeed the present Mexican President Miguel de la Madrid Hurtado. Since Mr. Silva Herzog has led Mexico's attempt to try and pay off the debt through fiscal conservative policies, he has been accused of following too closely the wishes of the banks. These US analysts say that in order not to be seen as ``the candidate of the IMF and of the banks'' Silva Herzog must favor a more nationalistic policy.

However, US analysts also stress that whether or not it is politically convenient, with Mexico's new economic difficulties, it is almost impossible for the country to keep to its payment schedules.

Brazil, under President Jos'e Sarney has also shifted its position. A jump in Brazilian exports has not seriously alleviated the debt burden or brought rampant inflation under control. President Sarney's new government, politically shaky since he took over after the death of popular president-elect Tancredo Neves, has been under strong domestic political pressure to depart from the repayment schedules.

In August, Sarney started making public statements that he would not sacrifice the well-being of his countrymen in order to repay the debt. Several weeks ago, two ministers, the Minister of Finance and the President of the Central Bank, both known to be strongly in favor of keeping to a strict IMF repayment schedule, were forced to resign.

Latin American debtor countries differ as to how they wish to change the repayments, according to one top Latin diplomat. Countries with a fixed annual income would find it most advantageous to simply pay a lower interest rate.

According to some Latin American countries, the ``historic'' interest rate has been 3 to 4 percent. Presently, interest rates are near an all-time high with Latin American countries paying between 9 and 10 percent. The more prosperous countries might tend to declare that they will pay the debts back but at the lower, ``historic'' interest rate.

Countries without assured annual foreign earnings might follow the Peruvian example and state that they will repay a fixed amount of their export earnings.

The countries' strategies will vary because of the differing degrees of economic difficulties they face, and because some have already renegotiated debt repayment agreements. Peru and Bolivia are in particularly dire straits and have announced they cannot meet present payments. Uruguay and Chile renegotiated repayment schedules this year and are not expected to reach a point of crisis until early 1987.

The key to the debtor countries' political problem is not just the pinch arising from present austerity programs.

The size of debt repayment leaves the countries with inadequate funds to invest in new growth. And slow growth combined with rapidly growing populations means falling living standards with little hope of improvement over the next few years. CHART: Latin American debt at the end of 1984 Brazil $100 billion Mexico $ 95.9 Argentina $ 46.0 Venezuela $ 36.5 Chile $ 18.4 Peru $ 13.2 Colombia $ 12.0 Ecuador $ 7.2 Uruguay $ 4.6 Panama $ 3.7 Dominican Republic $ 3.5 Bolivia $ 3.1 Other countries 5.9 TOTAL LATIN DEBT $350.0 billion Source: Commerce Department