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Third World Debt “Third world debt has long been recognized as a major obstacle to human development. Many other problems have arisen because of the enormous debt that third world countries owe to rich countries. Debt has impeded sustainable human development, security and political or economic stability. How has this happened?” - Anup Shah
History of Third World Debt • As countries have gained their freedom they have instantly entered into debt. • Many of these countries went to their colonial masters for loans. • The World Bank and IMf were formed after WWII to help out. • The debt had been simmering since the 1970’s and finally became a crisis in the 1980’s
Current Status of 3rd World Debt • Hundreds of nations suffer from this form of debt. • Many countries have been forced to forfeit health care so they can make payments on their debt. • Two programs exist to aid needy countries; the imf and the World bank. • The world debt is illegitimate.
Reasons for Third World Debt • As these countries emerged from being colonies they were undercapitalized. • “In the 1960s and 1970s, African countries became indebted to international lenders as they accepted loans for political and economic stabilization in the post-independence era.” (http://www.africaaction.org) • Predatory entities that feed upon weak and underdeveloped nations. • Corruption in the high government offices of funds intended for Aid.
Previous Attempts to End Debt • The first attempt the U.N. made was in 1980 when this problem first erupted. • The problem was to be deliberated during the forty-first session • Still not an answer to the problem, the Imf’s Structural Adjustment Program has been in use since the 1980’s. • “…the Paris Club, an informal forum where creditor governments review and reschedule debt payment programs for poor countries.” (http://www.africaaction.org)
Ultimate Outcome • Debt forgiveness of third world countries; this would release the vice that holds back the governments economic growth. • Debt restructuring of third world economies-lower interest rates. • If no resolution is reached the whirlpool of debt will snare all the 100’s of nations and continue to oppress the people and governments until
Implementation Plan • To reach a solution to this problem in this century will conjure up inverse investment plans where large sums of money must be lost to make an even greater sum in the end. • The Lender and debtor nations must come to an agreement on a feasible debt. • For all nations unable to pay off a lessened debt the only other option is debt forgivness.
Works Cited • Egendorf, Laura K., ed. The Third World. San Diego: Greenhaven Press, Inc., 2000 • Hanlon, Joseph. “The Effects of the Third World Debt.” Columban Missionaries. 2000. 1 March. 2006 <http://www.columban.com/debteffc.htm> • International Monetary Fund. 2005. 1 March 2006 <http://www.imf.org> • Mills, Martin. “Music Biz Can Help 3rd- World Debt Campaign.” Billboard. June. 1999: 6 • Pettifor, Ann. “How the World pays First World’s debt.” Odious Debts. 21 June 2002. 1 March 2006 <http://www.odiousdebts.org/odiousdebts/index.cfm?DSP=content&ContentID=4673> • Shah, Anup. “Third World Debt Undermines Development.” Global Issues That Effect Everyone. 03 July 2005. 20 March 2006 <http://www.globalissues.org/TradeRelated/Debt/Causes.asp#OdiousDebt> • Various. 2005. 19 March 2006 <http://www.xat.org/>
