Latin America Financial Crisis Case Study

Latin America financial crisis are very elegance and seem very hard and impossible to solve. Although it is, here are some way taken by Latin America in means to reduce their financial problems. Firstly, according to Dr. Luisa Blanco in his book of Latin America and the Financial Crisis of 2008: Lessons and Challenges: " Just like the United States, many Latin American countries used fiscal stimulus through greater government spending to address the crisis. Because of the reforms they implemented in the 1990s, which forced governments to be more fiscally responsible, many Latin American countries had more room to maneuver and to implement these fiscal policies." (Blanco, 2010)

By using fiscal in their monetary system,Latin America can manage its source of money in best way to decrease its national debt and in same time can improves their economic growth although it will take long time to solve this crisis but at least it will give positive effect in long term to Latin America country.Besides that,Latin America also use another strategy for reducing its debt.This is because,paying debt is the most importance thing to being solve.If a country cannot find their way in solving debt,country cannot being rise in the international system and also put that country in dilemma.Because of this Latin America make a move which is according to Eduardo A. Cavallo and Eduardo Fernández-Arias,2012:

"After several years of crisis, a new multilateral strategy eventually emerged, prompted by the start of social upheaval. This new strategy, the Brady Plan, recognized that the debt overhang needed to be eliminated through deep debt reduction, in a way similar to bankruptcy reorganization." (Eduardo A. Cavallo and Eduardo Fernández-Arias, 2012)

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...osure to Latin American debt, they were often reluctant to participate in the debt reschedulings neces- sary to keep the larger banks from folding in the event of sovereign loan default. (MILLER, 2002) those two method apply by Latin America are used in means to reduce its financial debt.It is can be said that the method used were quite success because now we can see Latin America are developing its country and moving forward.If this method not success,there is no way for Latin America to develope its country as today.They will not able to manage its debt dillema and at the same time to develope their country.For conclusion,Latin America manage its debt crisis by using some method or plan like stated above and get help from another country like Japan where from time to time they manage to reduce their financial debt using the best way for their people and country.