Debt, Defeat and Democracy: How the Crisis Ended Military Rule

This article records tradition as it has been passed down and reported. Its sources are not yet part of the atlas's verified catalogue.

The debt crisis broke over Latin America at the same moment several of its largest countries were already governed by military juntas that had borrowed heavily to finance industrial growth. In Argentina, the junta's defeat in the 1982 Falklands War arrived alongside a financial collapse in which interest payments alone were consuming the entire national trade surplus, and the combined blow brought the military government down. Argentines held their first free presidential election in a decade in October 1983. In Brazil, the process ran slower and more improvised. A civil campaign called Diretas Ja drew crowds over a million strong through 1983 and 1984 demanding direct elections, but fell just short in Congress; an electoral college chose opposition figure Tancredo Neves as president in January 1985 instead. Neves never took office. He fell gravely ill the night before his inauguration and died five weeks later, and his running mate, Jose Sarney, became Brazil's first civilian president since 1964 almost by accident. Whether the debt crisis directly caused these transitions or simply arrived alongside them remains debated, strongest in Argentina's case, more gradual in Brazil's, but in both countries the economic collapse and the end of military rule are impossible to tell apart cleanly.