Case 330 - From Miracle to Crisis: Brazilian Foreign Debt and the Limits of Obligation
Landy, Thomas M.
In a September 1986 speech to the United Nations, Brazilian President Jose Sarney declared that his country's massive debt imperiled its newly restored democracy, and warned that Brazil would not "pay its foreign debt with recession, nor with unemployment, nor with hunger." Such crises illustrate the reality that some global financial obligations become so onerous that they must be restructured or forgiven--yet there is no single entity in the international arena with the authority to make and enforce such a binding determination. This case study codifies and explores a set of questions whose answers can help resolve such challenges, which--as we have seen in Greece, among other countries--remain as relevant today as they were 30 years ago. It would be appropriate for courses in world politics, international political economy, development issues, and foreign policy analysis at the graduate and undergraduate levels.