1. Debt And Debt Relief IB SL

2. Debt There has been much made recently of the proposals for debt relief in the less developed world. The impression you would get in much of the press was that president Clinton had simply wiped out debt. This was not strictly the case. Why???

3. Bill Clinton: 1999

4. Arguments For Dropping Debts... If it happens it will probably be the biggest step ever in tackling the problems of the developing world. The announcement has led to much debate between world leaders with the purpose of reducing world debt. A reduction in world debt will allow these countries to address their problems such as water supply, health care and education. Gordon Brown's proposals to link speedier debt relief to those countries that abandon war and conflict has been well received by most world leaders.

5. Criticisms For Dropping Debts... People are questioning the speed with which action is being taken. In fact every day that goes buy see those in debt paying about £60 million pounds in debt payments. Little has so far been done. Ironically when the world leaders met again in Japan to discuss the progress £500million was spent hosting the conference. This is more than Japan's contribution to reducing developing world debt! (The Guardian 21/07/2000.)

6. Activity... Look at the following Case Study about the IMF and what they have done to reduce poverty in LEDC’s... What are the benefits and problems the IMF is facing?

7. Debt Relief and the IMF... As mentioned earlier, there are already processes of debt relief in place but these have received considerable criticism. The IMF (International Monetary Fund) is often criticised for the way in which it offers help to indebted countries. In Guyana, for example, the IMF insisted that they sell off their natural resources to cover debts. These included wood, gold and bauxite - this of course greatly hinders the countries chances of generating future wealth. The country was told it could just pay off the interest on its debts and if necessary borrow more to do this! In a great struggle to meet repayment targets and have some debt written off, the country has suffered greatly. Forty-five percent of all earnings go to pay off debt. This means that the country can barely afford to pay teachers or doctors. As a consequence, the country has fewer than 250 doctors and untrained teachers staff schools. Trained nurses are emigrating because the wages are so terrible. In fact, just 15% of public expenditure goes on education, health and welfare. In many areas, such as Tiger Bay, residents live in complete squalor. Water supplies are available for just a few hours a day, there is no sewage system and drug abuse and prostitution are common. The situation for many is getting worse and all they are doing is paying off the interest and a little of their debt!