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If we could sort out the issue of debt, we could get on with development. Discuss this view of the crisis facing the world’s poorest countries.

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Introduction

If we could sort out the issue of debt, we could get on with development. Discuss this view of the crisis facing the world's poorest countries. Third world countries are in billions of pounds of debt, and spend more repaying this, than on important services like healthcare. African nations spend approximately $13.5 billion per year repaying debts - more than double the amount they spend on healthcare, and roughly equal to the amount needed to combat AIDS/HIV each year. They are never going to be able to pay off their debts, especially with the rising interest - therefore it will be extremely hard for the countries to develop any further. The key areas I will look at in this piece of coursework are: * Development - What is it? How is it measured? Why are some countries less developed than others? * Debt - How did the crisis start? Other reasons why countries are poor. * Dropping the debt - "Jubilee 2000" and "Drop the Debt" schemes. Why it would help development to drop the debt. What problems dropping the debt would cause. * My opinion - Do I think the debts should be dropped? ...read more.

Middle

In 1973/4 oil prices quadrupled and huge profits were made, which were deposited in Western Banks. Interest rates plummeted, and the banks were faced with an international financial crisis. The banks then decided that they would lend money, to try and solve this crisis, without thinking how it would be used or paid back. Third World Governments took advantage of loans at low interest rates. When Western economies recovered from the crisis, oil prices and interest rates rose. As a result, Third World countries earned less than ever for their exports of coffee, tea, sugar, copper, etc. Coffee fell from 3,000 pounds per ton in 1976 to 600 pounds per ton in 1986. They were also paying more than ever on their loans. The International Monetary Fund and the World Bank then stepped in with new loans to help pay the interest, however, this action has increased the debt burden of some of the poorest countries in the world, essentially making them bankrupt. Apart from being in debt, these countries are also being prevented from developing, as many of them have a lack of infrastructure - such as weak communication links and poor telecommunications. ...read more.

Conclusion

I believe that Third World debt should definitely be abolished as the future of the whole planet depends on the economic success of every country. Until the crisis is sorted out, technological, scientific and social development cannot take place. The development of cures for disease and availability for cures for diseases are not available to Third World countries as they are in debt. When Third World debt has been cleared the world can develop a global community and advances can take place. Basic needs, although essential, can be met, for example, giving access to clean water to everyone, educating the population, and more money can be spent on healthcare to help stop the problem of AIDS. More complicated needs can also be met, for example, wars can be stopped, disease can be halted and explorations of the planet and humans can go forward without any problems. I also believe that some money should be given to those countries which are also very poor who do not have debts - as this is unfair if these countries have borrowed wisely, but only the countries in debt are getting help. It would give all the Third World countries a second chance. Development will never be able to take place, unless all the countries of the developed world think of others by abolishing all debt. ...read more.

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