The Origins of the 1980s Debt Crisis

The 1980s debt crisis was the result of imbalances in the post-1971 highly financialized dollar system. The United States aimed to put an end to third world development and imposed structural adjustment programs that stifled growth. The debt crisis came after a period of lending that did not have significant developmental impact. The presence of China as a major developing country and lender is a key difference in the current crisis. The ecological crisis is another important factor, as repaying debts often involves stripping natural resources and degrading ecosystems.