Transitions into democracy: convergence and distinct pathsIn mid-1982 Mexico's Minister of Finance, Jesús Silva Herzog, arrived in the United States and announced that his country was not going to continue paying its foreign debt. Silva Herzog's declaration was soon followed by debt defaults in many other Latin American countries, marking the beginning of the region's most serious economic crisis in this century. This crisis involved the partial breakdown of Latin America's financial and trade linkages to the world economy; the cessation of new credit money paralleled an interruption in the flow of capital investments, amounting to a total reversal of the financial patterns of previous decades. (The level of foreign investment, especially in manufacturing and mining, had been relatively high since the mid-1950s, albeit with significant differences from country to country).The debt crisis coincided, not incidentally, with a convergence of the political trajectories of five of the region's more industrialised countries: Mexico, Brazil, and the three Southern Cone nations of Argentina, Chile, and Uruguay. All five governments – the South American military dictatorships and Mexico's stable authoritarian PRI regime – experienced periods of political turbulence closely related both to the severe economic disruptions and to other domestic and international influences.One of the remarkable aspects of this 1982 political convergence was that it came after the ‘long decade’ of the 1970s, during which the governmental routes of the five countries had been extremely divergent. In Argentina, for example, instability, militarism and political violence had intensified, starting in 1969; these phenomena then spread to its traditionally more democratic neighbours, Chile and Uruguay.
Public Debt and External Reserve: The Nigerian Experience (1981–2013)