Political Science 1020E Lecture Notes - Lecture 8: Structural Adjustment, World Trade Organization, New International Economic Order
6 Nov 2015
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The banks need to reinvest the opec money deposits in. 1. order that they make money to pay interest on those deposits and make a profit. Asian and african states (debtor states) with excellent terms (no payment periods, no strings, etc. ) and low interest rates (1%-5% in many cases) The banks lend money to latin american states (mostly), In the late 1970s-1980s, us starts to run big deficits and to. Us raise interest rates to get investors to invest in american banks. Banks raise interest rates and demand loans back. Debtor states aren"t able to make interest payments. 1. secure its economy, it starts to raise us interest rates to get investors to hold onto us dollars and invest in american banks (to pay for the deficit spending) Restructuring the debt crisis continues today nearly billion owed by the world"s poorest countries.
