An analysis of the International Monetary Fund and the impact of its policies in Latin America

How had the external debt level in Latin America become so unmanageable? What were the causes of these high debt levels? Four nations were studied to determine what a debt crisis event might consist of Argentina, Bolivia, Brazil, and Colombia were examined for the period 1975--1995.; Data was gathered from two main sources, the U.N. and the I.M.F. Statistical Yearbooks. The data were entered into the SPSS statistical program version 8.0 for Windows. Parameters and subsequent testing were set to the programs defaults for simple "t" tests and Pearson correlation tests. However, for linear or 2 stage least squares regression testing, the forward stepwise method of inclusion of variables into the equation was used. Each Null Hypothesis was tested independently of the others. The ".05" level of significance was used for testing Hypotheses 1--5. Hypothesis 6 used a 60% level inclusion parameter.; H1 and H2 results show no statistically significant influence by global and external variables on the level of debt. H3 supports the premise that capital inflows, national output levels, inflation and investment levels, influenced debt levels. H4 and H5 conclude that the five internal variables had predictive qualities regarding External Debt as a dependent variable. H6 confirmed that interest rates, capital formation, per capita earnings, capital inflows, and gross domestic product have had an impact on debt level among the four nations in Latin America.; A model of debt crisis in Latin America would appear as a sequence of events. As increased exports generate additional capital, the additional capital is only minimally invested and used for import consumption. Large capital inflows from exports use expendable monies to repay debt. Debt and interest levels outpace expendable capital. Internal savings and reserves are not built up due to frequent currency collapses. Expendable reserves or savings are used to bolster failing infrastructure. The rescue of the failing infrastructure allows insufficient resources to adequately adjust the economic structure. Because of the lack of sufficient internal economic structured expansion abilities are decreased. This decreased expansion potential allows debt to outpace economic ability to repay debt under the existing structure.