Policy and Political Implications of Foreign Indebtedness in Mexico

This Article Will Discuss some of the implications of Mexico's indebtedness, particularly those which derive from the connection between the foreign debt and the rapidly growing domestic debt. The debt of developing countries is one of the great barriers to the recovery of the world economy: it cancels markets which would otherwise be open to the exports of industrialized countries, and it relegates a very large portion of the world to a situation of low growth or stagnation. Without doubt, Latin America is the region worst hit by the world debt, a continent which, only two decades ago, offered one of the most promising areas for expansion: it had a relatively advanced industry and urban sector, with political democracy and a large middle class. All this seemed to fall apart after the debt crisis of the 1980s, but the problems which led to this crisis began back in the late 1960s, when democratic governments began to be supplanted by military ones.