During the debt crisis in Latin American countries in 1982, there was a phenomenon called petrodollar recycling. Explain what petrodollar recycling means, and how it caused the debt crisis. [4 MARKS]

In an attempt to reduce the size of loan write-offs, creditor banks created debt-to-equity swaps and sold them to multi-national corporations (MNCs) Briefly explain what a debt-to-equity swap is. What were the reasons for MNCs to get involved indebt-to-equity swaps? [6 MARKS]