Latin American Debt Crises

Frank Griffith Dawson finds echoes of the present in Latin America's financial situations of the past.

Exactly eight years ago this past August, Mexico informed its banking creditors that it could no longer service its international obligations. Other Latin American nations followed suit. Soon lenders, borrowers, governments and international institutions were embroiled in a series of renegotiations and reschedulings aimed at averting a global financial crisis which could destroy the international banking system. The problem is still not resolved.

This seems, therefore, an appropriate moment to recall that the debt crisis which since 1982 has plagued Latin America's relationship with its foreign bankers has venerable antecedents. In fact, it is but the latest in a continuing series of borrowings and defaults which have reappeared at fifty- to sixty-year intervals since the first Latin American debt crisis exploded in 1828.

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