Debt and Imperialism: Perspectives on the Debt Crisis

Abstract

For those interested in international development linkages, the foregoing statement by the World Bank is reminiscent of the adage reporting a successful operation and a dead patient. International banking may have become more secure, but the role of foreign equity in the vital task of facilitating growth and development in the Third World is irreparably compromised. A banking system that can only protect the interests of the creditor countries is scarcely international. This chapter examines how far and in what ways we can charge United States policy-makers with the responsibility for the lost confidence of private capital to lend to borrowers in less developed countries and for the threats to stability of the international political economy. More specifically, we consider whether the US will continue to act in a hegemonic fashion in its policies affecting Third World external debt, or whether it has simply reacted to events because of a decline in capabilities, relative to those of other major states, and cannot mobilize the energies for system leadership.² The modest goals and still more modest success of the recent voluntary debt reduction scheme espoused by US Treasury Secretary Brady amongst other measures, seem to indicate a dangerous gap between international financial system needs and the leadership that can be offered by the United States. This apparent impotence of the United States Government to achieve its desired goals in negotiation with either debtor countries or with the major banks runs counter to the allegations of coercive imperialist domination and exploitation.

The threat to the international banking system has abated ... But most of the indebted countries are no better off than in 1982 when the debt crisis erupted.¹