For the time being we are left with the Mexican and Peruvian options - both of which imply considerable sacrifices by the poor. The fact is that most of the debt cannot be repaid. Those countries who do try to pay find themselves hemmed in on all sides. First there are the financial pressures. Banks in the rich countries are demanding payment.
Payment can only come from increased foreign exchange earnings.
But other businesses in the rich countries are demanding protection against such increased exports. Then there are the political pressures. The IME and the World Bank are demanding the kinds of adjustment that bite into living standards. But the poor already on the breadline can t make many more adjustments. Increasingly they will be taking to the streets to shout their protest.