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Political and economic imlications of international debt

...... Not being able to repay international loans meant several things from a political perspective. First of all, it meant that the country lost its credibility on the international financial markets. The loss of credibility would mean that, for a certain period of time, the country would be denied access on the international market. It would not be able to either borrow or participate in any way to the international circulation of capital. This was the case with Argentina after its default in 2002, when the country was excluded from the international financial markets for 4 years
Second, the retainers of the countrys foreign debt can impose political pressures on the receiving country, in different forms. The most obvious form, advocated by John Perkins in his book, was that they would request political favors in exchange for financial facilities or for accepting the fact that the country would not be able to pay off its debt. As mentioned, especially in the context of the Cold War, this was essential. On the other hand, with instruments that allow for the debt to move around owners, the political pressure could come from third parties and other interest groups as well, not only