The Debt Cannot Be Paid

The history of the Latin American debt is by now fairly well known, but it is worth recalling its more salient features in so far as these have a bearing on future policies. Above all, one must be clear that the roots ofthe debt crisis lie not so much in the internal economic affairs of Latin America as in a series of profound changes in the OECD-dominated global economy, leading ulti? mately to the disintegration of national and international controls over private capital movements, a disintegration signalled by the abandonment of the post-war Bretton Woods Agreement during the 1970s. It was this broader development, generated by the increasing difficulties of the US economy, which made possible the emergence of private banks as the princi? pal lending agencies to selected Third World countries, where previously their needs would have been covered by official loans tied to specific projects. Particularly important milestones in this weakening of international institutions were Nixon's devaluation of the dollar and abandonment of the Gold Standard in 1971, the end of fixed exchange rates in 1973, and the introduction ofthe Second Amendment to the IMF's Articles of Agreement in 1978, which in effect allowed priority to be given to national over inter? national economic interests

Debt · Economics · External debt · Financial system · Latin Americans · Macroeconomics · Political science · Economic Theory and Policy · Global Financial Crisis and Policies · Law

• The Appeal of Confiscation in Economic Development

  Martin Bronfenbrenner•Economic Development and Cultural…•1955

  Add to list