TITLE

LATIN AMERICAN DEBT

AUTHOR(S)
Kuczynski, Pedro-Pablo
PUB. DATE
December 1982
SOURCE
Foreign Affairs;
SOURCE TYPE
DOC. TYPE
Article
ABSTRACT
This article addresses issues related to the economic situation of Latin American countries as of 1982. In August 1981, Mexico, the largest single recipient of Eurocurrency bank credit in recent years, announced that it could not for the time being meet its scheduled repayments of principal on the external debt of the public sector. Service on the Mexican private sector and banking system debt is sporadic or interrupted because of the shortage of foreign exchange. Argentina has in effect been unable to meet its scheduled debt service since the time of the South Atlantic conflict. And, since mid-1982, international bank lending to Latin American countries has all but ground to a halt. As a result, Brazil may find it very difficult to meet its scheduled debt service, since, like the other countries in the area, it needs a constant inflow of funds to pay off old debt. The problem for such countries is in a sense as if the U.S. Treasury suddenly found itself unable to borrow. And, at the same time, most countries of the area, both large and small, with a few notable exceptions, face extremely difficult economic problems. These stem in most cases from the combined effects of the international recession and domestic fiscal deficits, which in turn originate in part from overly optimistic projections back in 1980 of what would happen to the international economy.
ACCESSION #
4852973

 

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