THE THIRD WORLD DEBT CRISIS IN THE 1980s AND 1990s/81Most countries of the South have entered a new cycle of heightened
dependence. Has the handling of the debt crisis by the North's centres
of power been responsible for this state of affairs?
What is the origin of the World Bank and IMF? How have they
evolved since being created in the heat of the 1944 Bretton Woods
conference?
What is the nature of the structural adjustment programmes
imposed on the overwhelming majority of Third World and former
'socialist' countries?
Is there a link between the debt crisis, adjustment policies and
crises of the type seen in Rwanda (1994) and Algeria?
This is the series of questions for which the following chapters will
seek to provide some answers. The stakes are high, since the very
well-being of the majority of the world's population has been affected
by the debt crisis and structural adjustment policies.
THE DEBT SURGE OF THE 1960s AND 1970s
Between 1961 and 1968, the Third World's total external debt rose
from S21.5 billion to S47.5 billion (Mandel, 1972).
Between 1971 and 1980, the Third World's total external debt
was multiplied by eight - from about 70 to more than S560 billion
(see footnote).
Yet both the media and the international financial institutions
themselves only started talking about the Third World debt crisis
after August 19 8 2 - when the Mexican government announced that
it would no longer be able to meet its regular external debt payments.
This created serious problems for the international financial
system, especially for the North's private banks. From that point on,
there was talk of a Third World debt crisis.
Yet the crisis had its origins much earlier on.
- The different international bodies (World Bank, IMF, OECD, UN Secretariat)
regularly publish reports on debt, but there are often significant differences between
their figures. These differences stem from (1) different methods of adding up incomplete
available figures; (2) differences in the nature of debt taken into consideration; (3)
different sample countries. For example, in its 1983 report, the OECD estimated that
total Third World debt was $552 billion in 1982, while the World Bank calculated it
at $59 6 billion. Subsequently, the OECD changed its method of calculation to include
short-term debt. As a result, its figure for 1982 jumped from $552 billion to $820
billion in its following report. The OECD changed its method of calculation again in its
1990report, further boosting the 1982 Third World debt figure to $854 billion. For
each year in the 1980s, there is a difference of at least $100 billion between IMF and
OECD figures! See Norel and Saint-Alary, 1988.