Emerging from a decade of steady, often impressive economic growth, Latin America is suddenly facing huge budget deficits, whopping foreign debts, and serious inflationary trends.
For most countries, this means significantly less growth is likely in the early 1980s.
It also means a growing dependence on international lending institutions like the Inter-American Development Bank (IADB), and individual wealthy countries' foreign-aid programs.
But this comes at a time when many giver nations, including the United States , are themselves facing more difficult economic conditions and are taking a closer look at their aid programs. And the US, under the Reagan administration, shows little enthusiasm for growth in the role of international lending institutions like the IADB and the World Bank.
Additionally, the cost of borrowing, both public and private, is up, fueling the spiraling foreign debt that saddles all Latin American countries, particularly Brazil and Mexico. Both of these countries have foreign debts of more than $60 billion. How to pay off this debt without borrowing more money, at higher interest rates, is one of the big challenges these countries face.
''The short-term outlook for Latin America,'' says a senior hemisphere economist in Washington, ''is bleak.''
He is not alone in his view. Throughout the economic and finance ministries of Latin America there is growing uneasiness about the immediate future. This uneasiness is felt most directly in the homes of individual Latin Americans, particularly those of the emergent middle classes who during the 1960s and 1970s started to climb the ladder of economic progress.