The Reluctant Giant: Japan and the Latin American Debt Crisis
The debt crisis has been the dominant feature of Latin American economic and political life since 1982. While the Reagan Administration gave greater priority to Central America, it nevertheless managed the international response to the debt crisis. US management initially seemed logical for several reasons: US hegemony worldwide, the traditionally close relationship between the United States and Latin America, and the leading exposure of US banks in Latin American debt. During the period since 1982, however, two of these three elements have changed. Japan has challenged US hegemony, although it certainly has not displaced the United States, and Japanese banks have caught up with their US counterparts as holders of Latin American debt.2 Despite their lack of traditional relations with Latin America, then, the Japanese are becoming increasingly – although perhaps reluctantly – involved in the region.