INTL DV 110 Lecture Notes - Lecture 10: Mexican Miracle, North American Free Trade Agreement, Revolutionary History
30 Mar 2021
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*not just strength of ideology but changing power structure under financial globalization. 1970s: good climate for borrowing for developing countries. Low interest rates, flexible loan repayment schedules. Speculative capital markets explode: from billion in 1973 to trillion 1982. Petrodollars: 1973 spike in oil prices ( to ) (political and financial causes of opec crisis) creates explosion of speculative capital. Speculative capital makes its way to wall street investment banks who see third world governments as relatively safe investments for loans. Relatively minor lender in global financial markets: reluctant banker (1944-68) Cultivates power to finance and funds new identity. Sells world bank bonds to private investors to raise capital for loans and projects (us 30214) Investors, not member or client countries, major stakeholders. Report in early 1990s: . 94 billion contributed by us banks results in ten-fold increase. Increased risk of loan default by third world governments (e. g. allende"s chile)
