POLD89H3 Study Guide - Final Guide: Global Environmental Politics, International Monetary Fund, Debt Of Developing Countries
Document Summary
Week 7: the global debt crisis, neo-liberal reforms and their consequences. At the end of 2004, the foreign debt of all developing and emerging market economies was more than . 7 trillion. That represented almost 40 percent of their aggregate gdp and exceeded the total value of their exports. Much of the ballooning ldc debt burden can be attributed to borrowing by commodity exporters. The so-called third world debt crisis of the 1980s accompanied a sharp fall in world commodity prices. Loans were required to compensate for losses resulting from a deterioration in the terms of trade, a problem that did not affect ldc exporters of manufactured goods. The roots run back to 1973-1974 when oil prices soared triggering an unprecedented expansion in international lending mainly commercial lending or recycled petro dollars. The 1973 and 1979 oil crises saw sharp increases in oil prices.
