A group of experts on hemispheric affairs said Tuesday that Latin America's $420 billion debt crisis could lead to military takeovers in some countries and recommended five "priority tasks" to restore economic and political stability.
One key recommendation was for debt reduction agreements to be negotiated between individual debtor countries and commercial bank creditors."Six years after the debt crisis began, Latin America remains mired in depression," said a report by the Inter-American Dialogue, a grouping of 66 prominent citizens from the United States, Canada, Latin America and the Caribbean.
The report, "The Americas in 1989: Consensus for Action," said the alternative for Latin America to decisive action is a "treadmill of austerity, stagnation and rising debt."
It said the crisis could condemn Latin America "to a long period of economic hardship and political turbulence."
The report recommended that:
-The nations of Latin America revamp development strategies, restructure their economies and effectively integrate them in the world economy.
-The United States address its own economic problems and join other industrial countries to reduce international financial imbalances, open world markets and sustain world growth.
-The international financial institutions sharply step up lending to Latin America, provided the debtor governments adhere to economic reform programs.
-Debtor countries and commercial bank creditors reach debt reduction agreements. Smaller and weaker debtor countries require outright relief from much of their obligations.