It is timed in months rather than weeks: sometimes years rather than months. By the early 1980s international Western banks and financiers confronted a nightmare. To explore mineral discoveries that never materialized and oil deposits that never actually brought black gold bubbling from the ground, they had loaned more money to developing Third World and Latin American countries than any of those countries could possibly pay back. By 1982 the combined debt was $626 billion. It was so much money, in fact, that the banks could not declare any one country in default: the loss would have been so enormous that the banks themselves would have gone bankrupt. One bankruptcy would have spread to another and from one financial centre to another and inevitably toppled the Western world’s financial structure. Those of Asia – Japan and Hong Kong – would have collapsed as well. The incredible resolve was to lend more money to the debtor countries so they could meet the interest payments on money they had no hope and sometimes no intention of paying back: the situation was of borrowers controlling the lenders, not the lenders dictating to the borrowers.
