Review of literature on Brady Plan Research Paper

Review of literature on Brady Plan - Research Paper Example According to Rosen (2008, 102-103), this period built a new government in the U.S. and saw the democratic elections in Uruguay, Chile, Brazil, and Argentina, and the establishment of new administrations in Venezuela and Mexico. Within this setting, cutting down debt was one method to bolster developing economies in Latin America. Consequently, these countries take advantage of democratic transformation as a bargaining ticket to gain more favorable debt arrangements. These countries, as developing democracies, thought that pressing for inflexible strictness and full debt settlement would estrange newly entitled voters and threaten the continued existence of democratic governments (Hiatt 2009, 388). In September 1985, President Garcia remarked quite frankly that â€Å"We are faced with a dramatic choice: it is either debt or democracy† (Maswood 2008, 94). In view of this, the objective of this research paper is to analyze the status of the Brady Plan after 23 years of its implementation with a focus on Brazil and Mexico. In particular, this paper tries to answer the question, how did the Brady Plan help solve the problems faced by Mexico and Brazil as a result of the Latin American debt crisis? The success of the loan industry ended in 1982 due to the emergence of the debt crisis, raising alarm on global markets (Buckley 2009, 54). This bleak condition forced several international financial organizations to generate a remedial program, which may function to prevent a potential disaster. This mission engaged the government of the United States, but not, at the outset, as the major player. Basically, the Brady Plan included a rigorous debt assistance program where industrial banks may select from a list of debt-stock reduction and new currency selections, practiced within the context of policy contingency (Iqbal & Kanbur 1997, 25). In actual fact, not many industrial banks were eager to grant a new