5
Globalisation and the
Growing Debt Burden
During the 1980s and the first half of the 1990s, there was a meteoric
increase in debt the world over. The share of Third World (and ex-
Soviet Bloc) debt in this overall debt has dropped. In 19 9 5, total Third
World external debt was SI,940 billion (OECD, 1996), while the US
public debt alone was S4.900 billion. According to the OECD, US
public debt accounts for 3 9 per cent of total OECD member country
public debt. The total public debt of European Union (EU) member
countries is more than S4.200 billion.
What has not declined, however, are the sacrifices imposed on the
majority of citizens in all countries in order to service these debts.
The phenomenon of globalisation described thus far and the debt
problem are inextricably linked. The process of globalisation began
in earnest in 1980 with the first wave of deregulation; the debt crisis
broke out around the same time, or perhaps even in October 1979
with the about-turn in US Federal Reserve policy under Volker (see
Chapter 7). The two developments were tightly intertwined. Post-
1982 debt-crisis management was very much part of globalisation;
it was an integral part of the realignment in the relationship of forces
between countries of the North and South. The countries of the South
entered a phase of heightened dependence.
Debt securitisation (see glossary) is another key element of the link
between the way in which the Third World debt crisis has unfolded
and other globalisation-related phenomena.
This securitisation concerns a significant part of OECD country
public debt along with both the external and internal debt of Third
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