Latin American debtor nations failed to honor $18 billion in financial obligations last year as the region’s foreign debt escalated further despite efforts to curb it, a study said today.
By the end of last year, 27 Latin American nations had a combined foreign debt of $434.6 billion, including $6.45 billion owed by Communist Cuba, according to the study by Caracas-based Latin American Economic System.
That amount is 1.5% higher than 1988’s total of $427.5 billion, the study said.
SELA, the only regional organization that includes Cuba, issued the document in preparation for a ministerial meeting to be held here next week.
Since its formation in 1975 as a forum for Latin American countries to debate economic issues, SELA has focused on discussing foreign debt problems and promoting regional economic integration.
Next week’s meeting is also scheduled to discuss President Bush’s initiative to create a continental free-trade zone. The initiative, launched last June, has been welcomed warmly by most Latin American leaders. The meeting will be the first time the region debates the plan collectively.
But debt remains Latin America’s main concern.
SELA said debt-related financial flows from Latin America by far surpassed the region’s real financial capacity. In servicing its debt, the study said, the region transferred $24.6 billion more than it received in new loans.
Since the outbreak of the debt crisis in 1982, Latin American nations paid creditors, mostly U.S. banks, more than $250 billion. But in new loans during the same period they barely received $50 billion, the survey said.
Chile, Colombia, Jamaica, El Salvador, Mexico, Trinidad and Tobago, Uruguay and Venezuela were able to service their debt regularly, the study said.
LATIN AMERICAN DEBT Countries overdue and the amounts they owe: Brazil: $5.84 billion Argentina: $3.25 billion Ecuador: $1.19 billion Peru: $5.86 billion Panama: $733 million Costa Rica: $400 million Dominican Rep.: $379 million Bolivia: $248 million Paraguay: $107 million