Fresh Start?: Peru's Legacy of Debt and Default (A)

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Case

Reference no. 9-703-001

Subject category: Economics, Politics and Business Environment

Authors: Julio J Rotemberg (Harvard Business School); Lisa H Lewis (Harvard Business School)

Published by: Harvard Business Publishing

Originally published in: 2002

Version: 27 February 2003

Length: 26 pages

Data source: Published sources

Topics: Debt management; International finance; Economy

Share a link: https://casecent.re/p/40540

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Abstract

Considers the situation facing Alberto Fujimori as he takes office in 1990. Pays particular attention to Peru's long history of international borrowing, default, and renegotiation. This history suggests that the costs imposed by foreigners on Peru when it failed to meet its contracts with foreign lenders have been relatively mild. Discusses the administration of Alan Garcia, who limited payments on Peru's international debt while also leading his country into an inflationary spiral. Also discusses some of the challenges posed by a bloody insurgency group named Sendero Luminoso.

Location:

Peru

Other setting(s):

1990