Free Essays on Debt Crisis

Debt is a healthy act for developing countries to improve their country’s economy and the welfare state of the citizens. For many years debt was the solution for third world countries but this solution has become their biggest problem today. Loans are adding up and third world countries are facing problems of paying back the amount they owe. The origins of the debt date from the mid 70’s and particularly the first oil price shock (Cline, p.13). The debt crisis then became a consequence of funds that were borrowed when inflation was high and interest rates were low. This crisis was viewed as a temporary problem at first, but today the debt crisis has been recognized internationally. Solutions have been presented to end the ongoing crisis which will be discussed in detail throughout this paper. This paper will discuss whether debt relief will address the needs of highly indebted countries? Solutions and their effectiveness will be presented and my argument is that debt re lief is a definite solution to HIPC, debt forgiveness was found to be the most affective. There are serious problems in many developing countries, such as unemployment and poverty. Many have huge debts which they cannot pay. Each country has a different financial problem which requires different solution. I feel that this debt crisis should be a concern to everyone. With the opportunities we have today, our education and our technologies people should not be suffering and countries should not be labeled ‘Third World’ countries. The whole nation should join as one and help build developing countries around the world as well as impose change in the future. According to Peters and Dents the Jubilee 2000 campaign seems to be a good way in assisting developing countries with their debt crisis. The sole purpose of Jubilee 2000 is to increase the support for changes in financial systems and parts of the debt should be remitted. The charity of Jubilee 2000 is base... Free Essays on Debt Crisis Free Essays on Debt Crisis Debt is a healthy act for developing countries to improve their country’s economy and the welfare state of the citizens. For many years debt was the solution for third world countries but this solution has become their biggest problem today. Loans are adding up and third world countries are facing problems of paying back the amount they owe. The origins of the debt date from the mid 70’s and particularly the first oil price shock (Cline, p.13). The debt crisis then became a consequence of funds that were borrowed when inflation was high and interest rates were low. This crisis was viewed as a temporary problem at first, but today the debt crisis has been recognized internationally. Solutions have been presented to end the ongoing crisis which will be discussed in detail throughout this paper. This paper will discuss whether debt relief will address the needs of highly indebted countries? Solutions and their effectiveness will be presented and my argument is that debt re lief is a definite solution to HIPC, debt forgiveness was found to be the most affective. There are serious problems in many developing countries, such as unemployment and poverty. Many have huge debts which they cannot pay. Each country has a different financial problem which requires different solution. I feel that this debt crisis should be a concern to everyone. With the opportunities we have today, our education and our technologies people should not be suffering and countries should not be labeled ‘Third World’ countries. The whole nation should join as one and help build developing countries around the world as well as impose change in the future. According to Peters and Dents the Jubilee 2000 campaign seems to be a good way in assisting developing countries with their debt crisis. The sole purpose of Jubilee 2000 is to increase the support for changes in financial systems and parts of the debt should be remitted. The charity of Jubilee 2000 is base... Free Essays on Debt Crisis I. Global Debt Crisis A. The harsh reality of poverty in poorer countries was an initial stimulus for loans in the 1970’s. 1. It consisted of poor countries, which suggested that borrowing money would contribute to the economic plight of their citizens. 2. The fact that those who live in rich countries and are given access to education, health care, good nutrition, housing, and live alongside other countries who go hungry, and endure homelessness and suffering is beneficial reasoning to allow loans to countries in need for uplift. B. I agree that contributing to countries, who are at a need for money financially is a positive retribution, which uplifts economy and population of the country. I also feel that the countries should have a limit to the time they are allowed for repaying their debt and the amount of money given. 1. These countries need to pay their debts quickly because the longer they wait the less their money is going to be worth. 2. Also if the countries don’t pay off their debts, then the countries that have lent money could become third world countries also. 3. Debts of the fifteen most destitute third world countries were $36 billion in 1980 and are $1.362 trillion today. C. Although some countries are having hard troubles repaying their debt, many countries are getting away, with avoiding their repayment. For example: 1.) Rulers such as Mobutu of the Democratic Republic of Congo should take their enormous profits and use some of it to lesson their countries debts. Mobutu made a personal fortune of 84 billion by the mid-1980’s 2.) Other countries such as Dominican Republic, Costa Rica, and Mexico have experienced significant increases in tourism over the past 10 years. Tourism brings in a large amount...