Origins
In the 1960s and 1970s many Latin American countries, notably Brazil, Argentina, and Mexico, borrowed huge sums of money from international creditors for industrialization; especially infrastructure programs. These countries had soaring economies at the time so the creditors were happy to continue to provide loans. Initially, developing countries typically garnered loans through public routes like the World Bank. After 1973, private banks had an influx of funds from oil-rich countries and believed that sovereign debt was a safe investment.
Between 1975 and 1982, Latin American debt to commercial banks increased at a cumulative annual rate of 20.4 percent. This heightened borrowing led Latin America to quadruple its external debt from $75 billion in 1975 to more than $315 billion in 1983, or 50 percent of the region's gross domestic product (GDP). Debt service (interest payments and the repayment of principal) grew even faster, reaching $66 billion in 1982, up from $12 billion in 1975.
Massive amounts of debt issued by dictatorships only worsened the situation
Read more about this topic: Latin American Debt Crisis
Famous quotes containing the word origins:
“Lucretius
Sings his great theory of natural origins and of wise conduct; Plato
smiling carves dreams, bright cells
Of incorruptible wax to hive the Greek honey.”
—Robinson Jeffers (1887–1962)
“The origins of clothing are not practical. They are mystical and erotic. The primitive man in the wolf-pelt was not keeping dry; he was saying: “Look what I killed. Aren’t I the best?””
—Katharine Hamnett (b. 1948)
“Grown onto every inch of plate, except
Where the hinges let it move, were living things,
Barnacles, mussels, water weeds—and one
Blue bit of polished glass, glued there by time:
The origins of art.”
—Howard Moss (b. 1922)