The New World of Debt

In: New left review: NLR, Heft 230, S. 91-114

Abstract

Analyzes & interprets the nature & evolution of the transnational debt problem in the international financial system by considering three questions: what has changed since the 1980s & why, who have been the participants in international lending & borrowing since the 1980s, & is transnational debt a threat to the international financial system? Transnational debt is defined as all kinds of debt across national frontiers, not just the specific financial credits extended between state governments. Reviews lending & debt practices since the 1800s into the 1980s & 1990s, followed by analysis of Mexico & the treatment of two foreign debt crises there in 1982 & 1994-1995. The effects of Mexico's debt crises on Brazilian foreign debt is assessed followed by a comparison of Asian debt to the Mexico experience. Discussion of the forgiveness of debt, failure of the African development bank, neglect of post-socialist countries of East & Central Europe, & the lack of a Marshall Plan-like initiative for these ex-socialist countries precedes a conclusion that there was no general "debt crisis" in the 1990s. Rather, there were different debtors with different crises who had not been granted the right kind of credit in sufficient amounts to address their needs properly. R. Rodriguez