International Debt Dealing With Debt
- This is a preview of the essay.
To view the full text you must login!
The majority of Third World countries are deeply in debt, to the extent that there is no likelihood of these debts ever being repaid. These countries give ridiculous portions of their total export earnings in debt repayments which lead to a devastating effect on the country, crippling its economy. International debt is not just an economical issue, but a moral one as well. In assessing the question of whether cancelling world debt is beneficial to countries' economical and financial futures it will be necessary to examine the origin of international debt. Christian beliefs and moral issues will be looked at and discussed before finally exploring the effect the debt has on these Third World countries.
The international debt story started back in the 1970's when the developed world nearly quadrupled the price of its oil. This was not good news for the oil-importers, but it made the exporters become richer and richer. This new found wealth of the oil-producing countries was invested in western banks. These banks now took advantage of the investment of these wealthy countries and encouraged struggling states to take out loans with few conditions and low interest rates to help to pay for the increasing oil bills. Unfortunately not all of these loans were put to good use; mismanagement of them led not to development, but was spent on military expenditure: Global recession in the early 1980's led to soaring interest rates and the collapse of the price of raw materials, the main export of the Third World...