The External Debt and the Economic Development of Latin America

Abstract

This chapter considers the external (which perhaps should be called the eternal) debt crisis of Latin America in four stages. First, we will explore how the debt problem came to be what it now is and the way in which it evolved into its present circumstances. Second, we address the reasons why the developed countries should worry about it. After all, why not allow the Latin Americans to stew in their own handling of the foreign debt? Third, it is necessary to examine what Latin America is doing to handle its debt burden and its implication for the performance of the Latin American economy. And fourth, some possible solutions to the defusing of the remaining debt bombs (those which have not exploded yet) will be examined. It will be shown that, as long as there is no chain reaction in the arsenal, the eternity of the problem should arouse interest, but not deep concern.