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This was tied into the oil shocks, which vastly increased the revenue and wealth in oil exporting countries, but increased monetary flows out of oil importing countries. The mid east producers, especially Saudi Arabia, were concerned to recycle the petrodollars so as to minimize dollar inflation, as oil is denominated in dollars. This left some of the big US banks flush with money to profitably invest.
The US banks, in the finest tradition, saddled up Latin American nations with as much debt as they conceivably carry, often with significant inducements to local elites, the results of which were that the local elites were mostly concerned that the loans got made, for their "commissions", but not that the loan be profitably invested. Much of the proceeds of the loans, aside from the "commissions" ended up being "privatized" by elites further down the feeding chain, and when the bloom came off the rose in the '80s, surprise! the debtors couldn't pay.
One description of this process can be found here. My guess is that in many cases, Latin American governments made loan payments out of loan proceeds, until they ran out of proceeds, hopefully after they left office and the country for Switzerland or other more salubrious climes.
"It is not necessary to have hope in order to persevere."
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