84/YOUR MONEY OR YOUR LIFE!
Borrowing was therefore an attractive proposition. Any number of
the South's leading government officials and enterprise heads from
the time can be found to testify that representatives from the North's
banks descended upon the South to offer loans, tripping over one
another to offer the most attractive terms. By the time the crisis hit in
1982, more than 500 banks had made loans to Mexico, more than
800 to Brazil (Bournay, 1994).
EASY MONEY AND THE 1974-75 WORLD ECONOMIC
CRISIS
When global recession hit in 19 74-75, the North's governments
implemented the kind of pump-priming measures that were very
common at the time - the idea being to boost production through an
increase in demand. This is the overall framework within which the
policy of easy credit for the Third World was continued. Now, it was
the turn of the North's governments to offer attractive loans,
especially in the form of export credits for the South. These loans were
provided to Third World countries on condition that they make
purchases from the industries of the creditor countries - of industrial
goods and other products, including military hardware disguised in
one way or another. Such bilateral loans (from the North's
governments to those of the Third World) aim to boost Third World
demand for products from the North. As a result of this policy,
between 1976 and 1980, the South's total debt grew at an annual
rate of 20 per cent (Bournay, 1994).
WHAT WERE THE LOANS FOR?
The World Bank and the North's governments and banks provided
loans above all for large infrastructure projects - energy mega-
projects, for example.
Loans were also provided to finance the balance of payments deficit
of countries of the South. Export credits were provided to back the
North's exporting industries.
All these loans obeyed the same overall logic - that of strengthen
ing the link between the countries of the periphery and the world
market, and of further steering these countries towards export-
oriented production. In the South, this meant abandoning local food
crops and industrial undertakings aimed at meeting the needs of the