The Latin American debt that reached crisis levels from 1982 would have been sharply reduced by return of flight capital - in some cases, overcome, though all figures are dubious for these secret and often illegal operations. The World Bank estimated that Venezuela's flight capital exceeded its foreign debt by 40 per cent in 1987. In 1980-82, capital flight reached 70 per cent of borrowing for eight leading debtors, according to Business Week estimates. That is a regular pre-collapse phenomenon, which we saw again in Mexico in 1994. The current IMF 'rescue package' for Indonesia approximates the estimated wealth of the Suharto family.
Debt can be and has in the past been cancelled.
There are other relevant precedents. In the 1970s, the World Bank actively promoted borrowing. The record continues to the present. Mexico was hailed as a free market triumph and a model for others until its economy collapsed in December 1994, with tragic consequences for most Mexicans. The report appeared just as the fairy tales collapsed.