ABSTRACT
By the late 1980s, however, the threat of financial disaster had receded despite the onset of 'Asian' financial crisis in 1997. The international banks had set aside sufficient 'loan-loss' provisions to secure their balance sheets against the possibility of default. The developing countries, on the other hand, had refocused their economies on servicing external debt, compressing imports with serious repercussions for economic growth and development (Warner 1992; Cohen 1992). The international debt crisis gradually evolved from a banking crisis into a development crisis and new initiatives by the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD or World Bank) were launched with the aim of ending what was widely perceived as 'debt slavery' (but see Vogl 1990). This chapter explores the changing nature of the international debt crisis. It begins with an overview of the changing debt position of the developing world. It then considers the reasons why developing countries become indebted and the causes of the post-1982 crisis. It finally discusses events since 1982, critically assessing the management of the crisis.
