Mexico’s Foreign Debt: Managing a Conflict (1973–1987)

Abstract

Mexico has played a key role in the financial conflict of the 1980s. Its acknowledgment in August 1982 of its inability to make payments marked the formal beginning of the so-called international debt crisis. Since then, its negotiations with the banking and financial community defined in terms of its explicit rejection of confrontation have been a major point of reference in overall management of the problem. At least for the period covered in this article (1983-1987), the various agreements reached between Mexico and its creditors set precedents as baseline models for the handling of other developing countries' payments crises. The following pages explore some political and economic factors which I believe help to explain the Mexican government's negotiating approach. It is a narrative of the events, which simply suggests lines of investigation for an interpretative essay on the origins, development, and most immediate results of Mexico's negotiations with international financial actors. In particular, I am interested in setting forth at least part of an explanation as to why the so-called Mexican debt crisis led into a situation of conflict rather than one of antagonism. In this regard one should note, paraphrasing economist Francois Perroux, that in an antagonistic situation the contradictions that have arisen between Mexico and its creditors would have demanded that strategies be geared to the destruction of one of the two sides.1 In a conflictive situation, on the other hand, the strategies unfold with the aim of reorganiz-