Quizzes & Puzzles0 min ago
3rd world Debt....
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For more on marking an answer as the "Best Answer", please visit our FAQ.Ignoring the very complex historical reasons - exploitation by other territories etc - the reason that these debts have occured is because of the way in which trade rules restrict these countries abililty to control their own economies. One of the key objectives of Make Poverty History is addressing the political issues that sustain the poverty traps and changing these trade laws.
Just cancelling the debts and/or providing more aid will not cure the problem in any long term way. If we learnt anything from Live Aid, it is that throwing money at the situation is not enough.
Sorry, to specifically address your comment about "a propensity for over spending" I would like to add that the debts we're talking about consist of compound interest on compound interest, meaning that the countries are expending vast proportions of their national income just paying off the interest - and failing.
Aid is often granted dependent on countries liberalising their ecconomies and allowing foriegn companies to set up. This typically has the net result of resulting in a net outflow of capital from the countries, again, further empoverishing the population. These are the kinds of trade agreements MPH wants to see scrapped.
This would help those who do not want all debt cancelled as that would affect their chances of borrowing sensibly in the future.
Even nations have a credit rating !
I would like to add that I am in favour of helping in the best way possible, and have been invilved in charities working to cancel these debts.
Also to add that a lot of this debt was actively encouraged by certain western countries - particularly those who benrfited by the spending of the loan money.