Credit Where Due? Banks, Debt, and Dictatorships in Latin America, 1973-1982

• In Event: The International Relations of Dictatorships in Latin America during the 1960s-1980s: Economics, Finance, Politics and Regional Solidarity.

Abstract

Most narratives on Latin American authoritarian regimes tend to overlook one crucial dimension: international finance. This omission is difficult to justify as nearly all of the regimes located in Latin America were dependent on external sources of financing and, starting from the 1970s, foreign capital became a strategic factor for their survival. Especially after the Oil Crisis of 1973, Western governments and Western banks started to provide huge amounts of capital to the developing world in a scramble for new markets and allies. Finance was not only a tool to keep Latin America in a state of financial dependency but it also became crucial to undemocratic governments to sustain developmental programs at home and to finance their domestic repressive apparatus. Ultimately the debts accumulated would bring some of these regimes on their knees by stimulating and reinforcing resistance movements. Thanks to newly disclosed documents from central banks (France and UK), International Organisations (IMF, OECD) and commercial banks in France and the United Kingdom, this paper will provide new understandings of the involvement of Western banks in the provision of finance to authoritarian regimes in Latin America. The article will show that Western banks greatly increased their presence in authoritarian countries starting from the early 1970s, that they were actively supported by their home governments and that foreign capital was instrumental in legitimising authoritarian rule. In doing so, the paper will contribute to foster our knowledge of the ‘Global Cold War’ by putting the agency of neglected actors in the foreground.

Author

• Edoardo Altamura, Graduate Institute of International and Development Studies Geneva