LATIN AMERICAN DEBT PROBLEMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00364R000400510018-6
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: June 17, 2010
• Sequence Number: 18
• Publication Date: July 29, 1983
• Content Type: REPORT

BRIEFING PAPER UU111 ILJLJ1 1 is 1-
Approved For Release 2010/06/17: CIA-RDP85M00364R000400510018-6
Latin American Debt Problems
There are growing fears that the international monetary
system is returning to the crisis atmosphere of late 1982.
Various Latin American countries continue to face difficult
economic situations. Falling oil prices have exacerbated the
debt problems of Mexico, Peru, and Venezuela, though the recent
stabilization of prices may relieve this burden. Governments
sensitive to the increasing political costs of austerity
measures will be under more pressure to resist them.
The international financial system has dealt successfully
with the initial challenges posed by the debt crisis in Latin
America, and we are actively involved in efforts to strengthen
the system. The IMF quota increase, the broadening of the
General Arrangements to Borrow, and increased consultation with
other industrialized countries are part of this strategy. The
U.S. believes that a combination of broadening economic growth
in the industrialized world, lower interest rates, appropriate
adjustment policies, and the type of measures mentioned above
will go a long way toward alleviating external indebtedness.
Nevertheless, political needs have led certain governments
to seek support for some form of coordinated Latin American
action with respect to external indebtedness. Suggestions have
included joint negotiations with commercial bank creditcrs,
declarations of unilateral moratoria on the repayment of
principal and perhaps interest, or at worst, collective
outright repudiations. Mexico does not favor such a debtors'
cartel.
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