Latin America Debt Market: Sources of Risks

Historically uncontrollably growing debt obligations of Latin American countries were the source of the risk of global crisis. Given the strategic importance of a number of Latin American countries as suppliers of key commodities to the global market, the issue of the region’s debt sustainability is...

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Autores principales:	A. V. Kuznetsov, S. A. Morozov
Formato:	article
Lenguaje:	EN RU
Publicado:	Ассоциация независимых экспертов «Центр изучения кризисного общества» (in English: Association for independent experts “Center for Crisis Society Studies”) 2020
Materias:	debt crisis regional shocks public spending efficiency latin america sovereign risks capital markets political and economic instability credit ratings fiscal policy International relations JZ2-6530
Acceso en línea:	https://doaj.org/article/44cf39ba60d249e998b630cc599cd856
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spelling	oai:doaj.org-article:44cf39ba60d249e998b630cc599cd8562021-11-07T14:45:05ZLatin America Debt Market: Sources of Risks2542-02402587-932410.23932/2542-0240-2020-13-6-9https://doaj.org/article/44cf39ba60d249e998b630cc599cd8562020-12-01T00:00:00Zhttps://www.ogt-journal.com/jour/article/view/707https://doaj.org/toc/2542-0240https://doaj.org/toc/2587-9324Historically uncontrollably growing debt obligations of Latin American countries were the source of the risk of global crisis. Given the strategic importance of a number of Latin American countries as suppliers of key commodities to the global market, the issue of the region’s debt sustainability is of particular importance in international economic relations. The purpose of the article is to reveal the level and nature of debt risks of Latin American states based on an examination of trends of their development. The relationship between a high level of public debt and low rates of economic growth as a factor of investor distrust in the region’s debt obligations was revealed, which negatively affects the cost of raising borrowed capital. The factors of economic and political instability in Latin American countries were generalized, including the prerequisites for the formation of a new debt crisis due to the annual increase in the volume of borrowed funds, mainly to cover the chronically growing budget deficits of Latin American countries, which, against the background of large-scale systemic shocks, makes their economies increasingly vulnerable. It has been substantiated that exposure to debt risk negatively affects the effective functioning of the state apparatus of Latin American countries due to the tendencies of a multiple increase in budgetary expenditures for servicing and repaying public debt. The authors analyze practice of a number of Latin American countries to compensate for the increase in the cost of servicing debtobligations at the expense of funds provided for social security of citizens, which provokes an aggravation of conflicts in the region. The prospects of economic stabilization in the region were discussed in the context of changes in the current model of income generation, oriented to the export of raw materials.A. V. KuznetsovS. A. MorozovАссоциация независимых экспертов «Центр изучения кризисного общества» (in English: Association for independent experts “Center for Crisis Society Studies”)articledebt crisisregional shockspublic spending efficiencylatin americasovereign riskscapital marketspolitical and economic instabilitycredit ratingsfiscal policyInternational relationsJZ2-6530ENRUКонтуры глобальных трансформаций: политика, экономика, право, Vol 13, Iss 6, Pp 161-180 (2020)
institution	DOAJ
collection	DOAJ
language	EN RU
topic	debt crisis regional shocks public spending efficiency latin america sovereign risks capital markets political and economic instability credit ratings fiscal policy International relations JZ2-6530
spellingShingle	debt crisis regional shocks public spending efficiency latin america sovereign risks capital markets political and economic instability credit ratings fiscal policy International relations JZ2-6530 A. V. Kuznetsov S. A. Morozov Latin America Debt Market: Sources of Risks
description	Historically uncontrollably growing debt obligations of Latin American countries were the source of the risk of global crisis. Given the strategic importance of a number of Latin American countries as suppliers of key commodities to the global market, the issue of the region’s debt sustainability is of particular importance in international economic relations. The purpose of the article is to reveal the level and nature of debt risks of Latin American states based on an examination of trends of their development. The relationship between a high level of public debt and low rates of economic growth as a factor of investor distrust in the region’s debt obligations was revealed, which negatively affects the cost of raising borrowed capital. The factors of economic and political instability in Latin American countries were generalized, including the prerequisites for the formation of a new debt crisis due to the annual increase in the volume of borrowed funds, mainly to cover the chronically growing budget deficits of Latin American countries, which, against the background of large-scale systemic shocks, makes their economies increasingly vulnerable. It has been substantiated that exposure to debt risk negatively affects the effective functioning of the state apparatus of Latin American countries due to the tendencies of a multiple increase in budgetary expenditures for servicing and repaying public debt. The authors analyze practice of a number of Latin American countries to compensate for the increase in the cost of servicing debtobligations at the expense of funds provided for social security of citizens, which provokes an aggravation of conflicts in the region. The prospects of economic stabilization in the region were discussed in the context of changes in the current model of income generation, oriented to the export of raw materials.
format	article
author	A. V. Kuznetsov S. A. Morozov
author_facet	A. V. Kuznetsov S. A. Morozov
author_sort	A. V. Kuznetsov
title	Latin America Debt Market: Sources of Risks
title_short	Latin America Debt Market: Sources of Risks
title_full	Latin America Debt Market: Sources of Risks
title_fullStr	Latin America Debt Market: Sources of Risks
title_full_unstemmed	Latin America Debt Market: Sources of Risks
title_sort	latin america debt market: sources of risks
publisher	Ассоциация независимых экспертов «Центр изучения кризисного общества» (in English: Association for independent experts “Center for Crisis Society Studies”)
publishDate	2020
url	https://doaj.org/article/44cf39ba60d249e998b630cc599cd856
work_keys_str_mv	AT avkuznetsov latinamericadebtmarketsourcesofrisks AT samorozov latinamericadebtmarketsourcesofrisks
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Latin America Debt Market: Sources of Risks

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