THE DEBT CRISIS IN HISTORICAL PERSPECTIVE/77industrial growth in Mexico, Colombia and Chile was stronger than
in Argentina.
After the Second World War, the countries that had suspended
external debt payment entered into negotiations with the imperialist
countries and obtained substantial debt reductions along with
payment facilities.
Argentina's approach, however, was not rewarded by the
imperialist countries. Argentina's main economic partner in the
North was Britain, which had obtained credit from Argentina to pay
for products Britain needed for the war effort (Vilas, 1993). Yet after
the Second World War, and with help from the US, Britain pursued
a policy that knocked off only a marginal portion of Argentina's debt
(for a detailed description of this episode, see Olmos, 1990).
The US Attitude to Debt Repudiation
The US adopted an attitude of tolerance towards the 14 Latin
American countries that unilaterally suspended debt payments. It
was not to be so lenient 50 years later; indeed, the US decided to pull
out all stops to prevent a repetition of the 19 3 0s. Backed by the other
G 7 countries, the Americans went on the offensive with a number of
initiatives in the wake of the 1982 Mexican crisis. They instituted the
Baker and Brady Plans in close succession (Bournay, 1994). US
policy-makers had concluded that the American attitude in the
1930s had paved the way for too much autonomous economic
development in a number of countries in their traditional sphere of
influence. This time, the US rejected cancellation and dealt with
debtor countries on a case-by-case basis. This, after all, is the stuff
world leaders are made of.
At a conference on external debt at Bern in 19 8 5, Henry Kissinger
declared:
There is no painless way in which indebted countries will be able
to resolve their critical situation, but we should suggest some
amendments to the IMF adjustment programme. The solution will
require some sacrifice; I prefer that indebted countries fulfill their
external obligations to debtors with real assets, through a
handover of public property, (quoted in Olmos, 1990)