The debt crisis of the 1980s, initiated by Mexico’s declared moratorium on
debt payments in 1982 (which came close to being repeated in 1995), called
into question the stability and very viability of the international financial system.
Fears were voiced that if one or two of the major debtor countries (Brazil,
Mexico, or Argentina) were to default, if a group of debtor nations were jointly
to repudiate their debts by forming a debtors’ cartel, or if more countries followed
Peru’s early initiative to link debt servicing to export earnings, the
economies of Western nations might be seriously affected. Following the onset
of the debt crisis, most developing countries were cut off from the international