The Global Cash Crunch An Examination of Debt and Development

The 1980s have been called the l̀ost development decade' because of the debt crisis. Countries burdened by massive debts experienced negative growth as borrowing patterns, interest rates, debt restructuring, and the terms of trade conspired to create a net transfer of funds from south to north. This document presents a discussion of how prescriptions from the north, hailed as solutions for the south, served only to recoup Northern losses and exacerbate the situation. It also discusses what has been learned from this situation and what can be done.