Debt Forgiveness
Debt has been choking the world's weakest economies and blocking economic progress for billions of the world's poorest countries. Governments borrowed money in the past for development projects, but often corrupt leaders stole the proceeds. To pay off the interest and principal, governments have been forced by creditors to slash their social spending. Even so, the debt burden continues to grow, placing the poorest countries in a kind of debt bondage. Campaigns such as Jubilee 2000 have demanded debt forgiveness, and a few debts have been canceled, but still the debt burden grows larger. Immediate and comprehensive debt cancellation is necessary for impoverished countries to participate in the global economy as anything but a permanent underclass. World Bank figures for 1999 show that $128 million is transferred daily from the sixty-two most impoverished countries to wealthy countries, and that for every dollar countries receive in grant aid, they repay $13 on old debts (Ambrose, November 2001). Much like a credit card, America loans this money and as time passes, interest on these loans grows extensively. When figured, a credit balance of one-thousand dollars would take approximately thr
Finally, Ahmed argued, setting aside the large sums of money for debt forgiveness would cripple the IMF and the World Bank and force them to cancel their support for middle- and low-income countries (Salt of the Earth, May 2001). A global bankruptcy should be filed. the deputy director of the IMF Policy and Development Review Department, Masood Ahmed, said the agencies have considered one-hundred percent debt relief and found it impossible for three reasons. Second, to include all the poor countries in debt reduction, the two groups would have to cut lending amounts because they are dependant on loan repayments for income. Part of that cancellation should consider the legitimacy of the current debt. In no way does that hurt the economy. First, it would not be fair to the poorer countries because the average debts of those countries once the countries have completed the HIPC initiative will match the average of poor countries that do not qualify for HIPC. The poorer countries of the world do not have the money to pay back the United States. That may be true, but is not the same true for credit card companies. With the $60 million average repaid daily, those in debt countries could spend that money on poverty reduction and health care. Even in America, if you do not have the money you need to pay your bills, you can file bankruptcy. It is true that if all the debt were forgiven then the United States would not have the funds to help other countries in their time of need, but if they did not owe the US money, then they would not need as much money. President Clinton said, "I don't think we can, in good conscience, say we support the idea that they should choose between making interest payments on their debt and investing in their children's education," announcing his plan to relieve one-hundred percent of foreign debt. They did not actually borrow the money--they just spent more than they had.
Common topics in this essay:
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Ambrose November,
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Masood Ahmed,
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Acceptance Essays
