THROUGHOUT THIS DECADE recurrent debt crisis coupled with declining growth and high inflation have been a characteristic of the economic performance of many countries. Latin American countries in particular fit this dismal economic picture. For much of this period South Africa was not placed in the same category as these countries despite double digit inflation and a poor growth performance. However, with the fall in the external value of the rand, culminating in the closure of both the foreign exchange and stock markets in August 1985, the precarious state of the economy in international terms became apparent. South Africa had joined the countries plagued with debt crises. Many reasons have been advanced for the causes of the weak performance in countries afflicted with debt crises. These include external shocks in the form of adverse terms of trade effects, interest rate effects, exchange rate management, trade policies and capital outflows. In this paper explanations for economic performance will be sought by evaluating these influences in countries which have recently experienced debt crises, such as South Africa, Brazil, Argentina, Mexico and Chile, and those that have avoided these crises, such as Korea and Thailand.