War and Debt in South America

Latin America was a media event in 1982. "The fire next door" in Central America continued to make front-page headlines. In the spring war broke out between Argentina and Britain in the South Atlantic, where space-age weapons were used to fight a conflict that seemed a throwback to the nineteenth century. By the end of the year the debt crisis was center stage, with Argentina, Mexico and Brazil struggling to avoid default on a collective foreign debt of $200 billion.

The story of Central America is told elsewhere in this issue. But what is easy to overlook is its impact on the Reagan Administration's policy thrust in South America. Preoccupied with falling dominoes in the U.S. "backyard," Reagan regarded South America as important more for its potential contribution to the U.S. effort in Central America than for itself. South America's military governments were seen as possible providers of training and weapons to their beleaguered Central American counterparts. The relatively wealthy democracies, especially those bordering on the Caribbean, were viewed as potential donors of economic assistance. Whether military or economic, however, South America's involvement in Central America would make U.S. policy there seem less unilateral.

Concern that hostile external forces might at some point expand their efforts beyond Central America-even to the strategic Southern Cone-led the Administration to set particular store on a much warmer and more cooperative relationship with the military regimes of the area. Moreover, the Reagan Administration clearly rejected its predecessor's strong and public preaching on human rights. Seeking to undo the perceived damage, the Administration adopted a low-profile human rights policy that stressed behind-the-scenes persuasion. It complemented these efforts with frequent high-level military visits aimed at further cementing U.S. ties with South America's anti-communist authoritarian regimes.