29 Minn. J. Int'l L. 243 (2020)
Ahead of the Next International Financial Crisis: Contextualizing Sovereign Default and Proposing an Improvement to the Restructuring Process

handle is hein.journals/mjgt29 and id is 529 raw text is: 








Ahead of the Next International Financial Crisis:
Contextualizing Sovereign Default and Proposing
an Improvement to the Restructuring Process

Lindsey Schwalbach*

                       INTRODUCTION

    Imagine living in a country where the economy is booming,
capital is flowing in, and families are happy.1 Now imagine
waking up in the same place one year later and finding that, due
to sovereign default, basic groceries cost five times the minimum
wage, 93 percent of the country's population cannot afford food,
over  90  people   have  been   killed during   demonstrations
demanding international food aid, and hyperinflation has risen
to 720 percent.2 Unfortunately, this scenario is not only the story
of Venezuela's suffering economy in 2017, but is the all too
common, very dismal picture of many countries that have
experienced default.3 Worse yet is the fact that it can take fifteen


    * J.D. Candidate, 2020, University of Minnesota Law School; M.B.A.,
2019, Carlson School of Management. I would like to thank Professor
Christopher Soper for his expertise and thoughtful feedback throughout this
process. I would also like to thank the Minnesota Journal of International Law
editors and staff members for all of their time and effort in greatly improving
this Note. Finally, my most heartfelt thanks to my family and friends for their
unwavering support and encouragement throughout law school. Tony, thank
you for being the absolute best and most supportive partner, you are simply
amazing.
    1. See Rocio Cara Labrador, Venezuela: The Rise and Fall of a Petrostate,
COUNCIL ON FOREIGN REL., https://www.cfr.org/backgrounder/venezuela-crisis
(last updated Jan. 24, 2019).
    2. Mercy Benzaquen, How Food in Venezuela Went from Subsidized to
Scarce, N.Y. TIMES (July 16, 2017), https://www.nytimes.com/interactive/
2017/07/16/world/americas/venezuela-shortages.html.
    3. See, e.g., Niki Kitsantonis, Greece, 10 Years into Economic Crisis,
Counts the  Cost to Mental Health, N.Y. TIMES    (Feb. 3, 2019),
https://www.nytimes.com/2019/02/03/world/europe/greece-economy-mental-
health.html; Elizabeth Melimopoulos, Argentina's Crisis: What Went Wrong and
What Is Next, AL JAZEERA (Sept. 16, 2018), https://www.aljazeera.com/news/
2018/09/argentina-crisis-wrong-180914154523757.html; Laura Sullivan, How
Puerto Rico s Debt Created a Perfect Storm Before The Storm, NPR (May 2, 2018,
7:10AM ET), https://www.npr.org/2018/05/02/607032585/how-puerto-ricos-debt
-created-a-perfect-storm-before-the-storm.


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