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Debt and Debt Crisis

  • By: Julie Cupples
  • In: Encyclopedia of Geography
  • Edited by: Barney Warf
  • Subject:General Geography, Earth & Environmental Science

The accumulation of Third World debt and the 1980s debt crisis are key historical events that have had long-lasting and dramatic economic, political, and social consequences for a number of countries in Africa, Asia, and Latin America. This entry discusses the history of the debt crisis, structural adjustment, responses and solutions to the crisis, and resistance to Third World debt.

History

In the 1970s, oil-producing countries increased the price of oil significantly, generating massive profits. These profits, referred to as petrodollars, were deposited in a number of Western banks, especially in the United Kingdom and the United States, and they were recycled by bankers in the form of loans to developing countries. Many of the loans were channeled to Latin American countries as well as to several ...

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