Should world debt be cancelled?
All third world countries are in billions of pounds worth of debt these are countries are in debt to the banks. Governments therefore have to increase taxes and sell assets, and they give no assistance to their local people in order to pay back the debt. This is a major reason behind the massive poverty and starvation in the third world. In this essay I am going to explore the reason behind third world debt and what should be done to help the countries in the most debt. Many countries try to help third world countries by giving aid. This is known as foreign aid but because of all the debt they owe does this do more harm than good? The dictionary definition of the term 'foreign aid' is: "The administered transfer of resources from the advanced countries for the purpose of encouraging economic growth in developing countries." However, so as not to confuse foreign aid with the investments of multinational corporations or commercial banks, many economists require foreign aid to meet distinct criteria: Its objective must be non-commercial from the point of view of the donor i.e. it should be given to the country in return for nothing. It should not be used as a way of making money through interest on repayments. The economic debts of the developing world will not be fully repaid, quite simply because the people who live in the developing world cannot afford to repay them. The harsh reality of poverty in poorer countries was an initial stimulus for the loans. Economic conditions suggested that borrowing money was a reasonable course of action in the 1970s, particularly for poor countries, which perceived few, if any, alternative ways to address the economic danger of their citizens. In 1987, the average per capita income for people living in the poor countries in the South was only 6 percent of the income in the developed countries of the North. In Africa, one-fifth of the population lives in poverty, with those in sub-Saharan Africa bearing the heaviest burden. A child in the developing world suffers a risk of death four to ten times greater than that of a child in Western Europe or North America. A pregnant woman in the developing world is 50 to 100 times more likely to die in childbirth than women in the wealthy, developed nations.
