The World's debt crisis, primarily concentrated in Brazil and Latin American countries such as Mexico, is also affecting multinational corporations around the world. The affects include decimated markets, blocked currencies, and a starvation diet of raw materials and essential parts for subsidiaries representing billions of dollars' worth of investments in less developed countries. These multinationals find themselves continuously investing in order to keep their subsidiaries alive. To cope with the harsh new conditions of the debt crisis, multinational are doing everything possible to prohibit their Third World investments from going under.

In some instances, multinationals are demanding cash on the barrelhead from some customers to extending credit to others in order to sell products and maintain market share. Some corporations have simply sold out. But still others are scrambling for financing on local currency and struggling to find locally made substitutes for essential equipment and components that used to be imported and paid for with hard currency. Some multinationals are resorting to barter and nearly all are hustling exports to earn hard currency for subsidiary operations. Multinationals are even stepping up their shareholdings in joint ventures, particularly in Mexico, by converting subsidiaries' debt into equity. It appears that multinationals are more sanguine than the bankers about prospects for the debtor countries, as in Brazil, which has a wealth of resources equal to anywhere in the world.

However, in Mexico and Brazil, multinationals are still feeling the effects of the crisis. One corporation reported "we're seeing more payment defaults on deliveries, particularly in Brazil and Venezuela." A major financial headache for multinationals is complex currency-exchange controls, coupled with massive devaluations that make it nearly impossible for companies to repatriate monetary assets. Many corporations had become lulled by the common Latin American practice of maintaining an overvalued exchange rate. While many multinationals had adjusted to Brazil's periodic cruzeiro devaluations, Mexico's three successive devaluations-dropping the peso 82% against the U.S. dollars since mid-February 1982-caught many by surprise.

Stung by such measures, multinationals took different approaches. Nearly all multinationals now try to borrow locally or are cutting production completely. A few companies have managed to pry hard currency out of Latin Central banks by threatening to close plants and lay off workers, but local authorities usually favor paying off foreign bank creditors first. Because of a need for massive infusions of fresh capital and debt rescheduling, debtor nations are particularly dependent on the commercial banking community. After Mexico's near-default in August 1982, "bankers were creating the impression that it was official U.S. and IMF policy that banks be paid first, " complains a lawyer for U.S. multinational . Accordingly, there is considerable resentment among multinational corporate executives over the speed with which the banks took care of themselves.

Alternatively, multinationals are turning to other techniques for coping with the crisis. They are pushing exports from LDCs as hard as they can , knowing that the more they export, the higher they will move on government waiting lines for hard currency. Despite the problems, most multinationals insist they are in Latin America and other debt-ridden

LDCs for the long haul.