The International Debt Problem: The Case of Argentina DECEMBER
01, 1985 by MICHAEL ADAMSON Michael Adamson is a graduate
business student at Arizona State University. The government of
Raul Alfonsin inherited a nation burdened with massive economic
problems when it was elected in December of 1983. Seven years of
military rule had all but de stroyed a once growing economy
under the machinations of the state. During the period of
military rule, the government tremendously increased its foreign
borrowing, from $8.3 billion in March, 1976 to $43.6 billion in
December, 1983. The Argentine situation is one example of a
larger problem: the incurrence of debt worldwide by government.
Since August 20, 1982, when Mexico announced that it could no
longer meet its debt service payments, some 30 nations have re-
negotiated terms on up to $100 billion of external debt.
Argentina itself declared a moratorium on its debt principal
late in 1982. Interest payments, which consume roughly two-
thirds of Argentina’s annual export e