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I was doing a bit of research in 2004-5 on some Latin American topics, at which time there'd been a lot of talk about renewing the practice.  I seemed to recall that Ecuador was seriously considering it, so I just did a quick and dirty search.  I can't vouch for the blogs linked here, having never heard of them before, but it appears that it's an ongoing thing:

Sept, 2008:  President Rafael Correa declared on Friday that Ecuador would not make a $30.6 million interest payment on $510 million in bonds due in 2012, calling the debt illegal.

The default on the Global Bonus 2012 bonds means that Ecuador is also defaulting on Global 2015 and 2030 bonds. The default totals $9.937 billion, 19 percent of the country's GDP. Ecuador has assembled a legal team to fight expected lawsuits and hopes to use the default as leverage to renegotiate the debts.

(...)The Confederation of Ecuadorian Kichwas (ECUARUNARI), the powerful Andean branch of the country's indigenous peoples movement, has long called the foreign debt illegal and illegitimate. "We have not acquired any debt. The so-called public debt really belongs to the oligarchy. We the peoples have not acquired anything or been benefited, and thus we owe nothing."

And the numbers here startled me.  I remember reading about the proposal, but had no idea it had taken off.  If accurate, this seems significant.

Oct., 2007:  (...)An Alternative to Debt Slavery - The Bank of the South

Last December, Hugo Chavez announced his idea for a Banco del Sur, or Bank of the South, as part of his crusade against the institutions of international capital he calls "tools of Washington." The bank will be officially launched at a presidential November 3 summit in Caracas, where it is to be headquartered, with seven founding member-states - Venezuela, Argentina, Brazil, Uruguay, Paraguay, Bolivia and Ecuador.

On October 12, Colombia's President Alvaro Uribe announced his nation agreed to become the eighth member but said "The decision is not a rejection to the World Bank or Inter-American Development Bank, but a sign of solidarity and fraternity towards the South American community." At this time, only four South American states aren't included - Chile, Peru, Guyana and Surinam, but Chile seems likely to come aboard following Colombia's lead, and the others may decide to join them.

(...)In 2005, 80% of IMF's $81 billion loan portfolio was to Latin America. Today, it's 1% with nearly all its $17 billion in outstanding loans to Turkey and Pakistan. The World Bank is also being rejected.

Perhaps it bears further research (I don't have time today) -- has anyone here heard anything about this?

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Aug 19th, 2009 at 04:43:20 PM EST
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