Other Latin American states began to emulate the Brazilian policy. The military coups in Chile ( 1 973) and Argentina ( 1976) were followed by an opening to external capital. And again the outcome seemed encouraging at first. Under the Videla regime in Argentina "the rate of inflation was lowered, real output grew, and a current account surplus was generated" ,98 while Chile's real GDP grew 8.5 percent a year between 1 977 and 1980.99
It seemed that a way had been found to achieve national accumulation by breaking out of the confines of the national market-and, when the policies were undertaken under military regimes, of crushing popular resistance to rising levels of exploitation. There was a similar swing of the intellectual pendulum as in the West and the former Communist states, with the wholesale conversion of "dependency theory" economists to the wonders of free markets. The conversions continued even as the Latin American "miracle" came unstuck.
Growth after 1974 had come to depend on foreign borrowing (as in Poland and Hungary in the same period). Many Latin American countries gambled on ambitious growth targets by borrowing heavily in international financial markets. The external debt of Chile and Argentina almost trebled over a few years, from 1978 to 1 9 8 1.100 But this did not seem to matter at the time-either to the national governments or the international banking system:
Up to the second oil price shock ( 1 979-80) the gamble was worth taking. Export growth was sustained in world markets at favourable prices . . . As a consequence the ratio of debt outstanding to export proceeds was more favourable for all non-oil developing countries in 1979 than in 1970-72.<sup>1</sup>0<sup>1</sup>
The End of the Golden Age
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