Latin America's response to the debt crisis

The debt crisis has produced the most drastic economic reversal for the economies of Latin America since the worldwide depression of the 1930s. It led to the unexpected efforts of regional governments to work together politically to ameliorate the social and political consequences of the crisis. The international system has witnessed, since 1983, the slow but deliberate effort of Latin American leaders to consolidate the return to democracy in key states of the region (Argentina, Brazil). Regional leaders have also had to deal with the growing social pressures throughout Latin America and the Caribbean in the midst of the economic adjustment process. Latin America's leaders have called for a redefinition of the debt issue. They reject the assertion that debt involves only the private commercial banks and the governments of the hemisphere. The Latin American governments argue that debt is overtly political and must lead to negotiations among the governments of the United States, Western Europe, Japan, and Latin America. It is important to emphasise that the call for political talks about the debt and its consequences have not been accompanied by threats either to declare a unilateral moratorium or to organise a debtors' cartel, although there are those in Latin America who think that this is a desirable course of action. The meetings of the political leaders of the hemisphere have been a model of reasoned and highly concerned analysis. Unfortunately, the response of the members of the Organisation for Economic Cooperation and Development (OECD) has been negative. Led by the United States, but with strong support from, among others, the United Kingdom, the industrial countries have indicated that the debt crisis is basically a financial question to be resolved between the creditors-the private commercial banks-and debtors, the governments and the private sector of Latin America. While emergency assistance will be available in the form of 'bridge' loans or special credits, it is not desirable to 'politicise' the crisis by opening