The wave of multiple crisis during 70s and 80s, especially with the LDCs and the middle income countries, led to a debate over the viability of foreign capital led development model and also on the need to have a more proactive IMF ,apart from giving a big push to developmentalism which rejects the monoeconomics. The crisis which has affected more than three dozen countries since then doesn't seem to be over, posing some ethical questions for the international finance , which have been highlighted by the proponents of dependency theory , however a more balanced addressing of the issued is required as to devise an early warning system and a more meaningful and proactive role of IMF. It also gives us an opportunity to readdress the eminence of having an institutional framework in the LDCs to absorb the initial shocks .In the following paper I plan to discuss the origin of debt crisis in the 1970s and the international response to it, how it brings to fore the vulnerability of LDC s on the volatile foreign capital ,and what lessons it holds in store for future .I also raise here the issue as to how the IMF acts as an extended arm of US and discussthe ruthlessness and myopia of market players. Also I consider this debt crisis as a continuing phenomenon as it has resulted in loss of confidence in many new and upcoming economies, apart from the fact that the countries like Mexico still are not out of the danger zone ,
             Debt crisis and the causative factors
             Post world war II economy was dominated by monoeconomics which thought that the laws of economics are like laws of physics and believed in the one fits all hypothesis . Most of the developed countries followed suit and the period between 1950-1970 saw a massive economic expansion in the LDCs with upward mobility of labour.To cater to the unsatiable demand of capital of the industries these LDCc took the easy path of borrowing from pr...