1. FACTORS LIMITING DEVELOPMENT DEBT

2. (A BRIEF) HISTORY OF DEBT IN AFRICA (DON’T COPY) AFTER THE FORMER COLONIAL POWERS (FRANCE, THE UK, BELGIUM, ETC) ALL PULLED OUT OF AFRICA, MANY COUNTRIES, FOR A VARIETY OF REASONS, STRUGGLED TO COPE THEY TURNED TO COUNTRIES AND FINANCIAL INSTITUTIONS IN THE WEST FOR LOANS QUICKLY AFRICA BUILT UP A MASS OF DEBT WHICH IN TURN IT STRUGGLED TO REPAY BY THE YEAR 2000 IT OWED ALMOST $400 BILLION IN LOANS THIS WAS AN AMOUNT EQUAL TO THREE-QUARTERS OF ITS GDP (WHAT IT MADE EACH YEAR) AND NEARLY FOUR TIMES ITS ANNUAL EXPORTS. LOANS WERE RESTRUCTURED OVER AND OVER AGAIN, EACH TIME WITH NEW AND EVER MORE STRINGENT CONDITIONS, SUCH AS FORCING COUNTRIES TO INTRODUCE FEES FOR SCHOOL AND HEALTHCARE BY THE START OF THE 21 ST CENTURY DEBT WAS SEEN AS SUCH A PROBLEM THAT THE RICHEST COUNTRIES IN THE WORLD AGREED TO WRITE OFF MUCH OF IT TO ALLOW AFRICAN COUNTRIES (THE ONES HEAVILY IN DEBT) TO RECOVER

3. DISCUSSION QUESTION – WHAT PROBLEMS DO YOU THINK ARE CAUSED FOR COUNTRIES WITH EXTREMELY HIGH LEVELS OF DEBT?

4. (SOME OF THE) PROBLEMS WITH DEBT CAN’T SPEND MONEY ON HEALTH AND EDUCATION WHICH ARE KEY TO THE DEVELOPMENT OF ANY COUNTRY IF COUNTRIES CAN’T GROW THEIR ECONOMY ENOUGH TO SOLVE THEIR DEBT PROBLEM, THEY SIMPLY BORROW MORE, EXACERBATING THE PROBLEM CAN’T INVEST IN INFRASTRUCTURE PROJECTS SUCH AS TRANSPORT LINKS GIRLS SUFFER IN PARTICULAR – IF FAMILIES HAVE TO PAY FOR SCHOOLING BOYS WILL BE THE PRIORITY

5. DEBT RELIEF FROM THE MID 90’S ONWARDS, MANY COUNTRIES WERE GIVEN RELIEF ON THEIR DEBT (EITHER CANCELLED OR RESTRUCTURED) AS PART OF THE HEAVILY INDEBTED COUNTRIES INITIATIVE (WE WILL LEARN MORE ABOUT THIS LATER IN THE COURSE) READ THE TWO CASE STUDIES ON ZAMBIA AND UGANDA AND ANSWER THE QUESTION BELOW. WHY DO YOU THINK THESE COUNTRIES HAVE A BETTER CHANCE OF DEVELOPMENT NOW THAN THEY DID BEFORE RECEIVING DEBT RELIEF? WE WILL LOOK AT THE IMPORTANCE OF EDUCATION/HEALTH IN FUTURE LESSONS HOWEVER NOT EVERYBODY THINKS DEBT RELIEF WAS OR IS THE BEST WAY TO HELP DEVELOPING NATIONS IN AFRICA IN PAIRS DISCUSS WHAT ISSUES THERE ARE WITH DEBT RELIEF AS A POLICY TO AID DEVELOPMENT

6. ISSUES WITH DEBT RELIEF REWARDS BAD ECONOMIC POLICY – HOW ARE LESSONS LEARNED? ZAMBIA, AMONGST OTHERS, HAVE ALREADY STARTED BORROWING LARGE SUMS AGAIN WHILE IT IS SUSTAINABLE, HOW LONG WILL IT BE BEFORE IT IS HEAVILY INDEBTED AGAIN? THIS IS ESPECIALLY A PROBLEM IF IT DOES NOT GO HAND IN HAND WITH GOOD GOVERNANCE (SOMETHING WE WILL LOOK AT LATER IN THIS UNIT) IF MONEY IS WASTED, THEN WE COULD END UP BACK WHERE WE STARTED DEBT RELIEF HAS GIVEN COUNTRIES LIKE UGANDA THE OPPORTUNITY TO GET INVOLVED IN TWO WARS (CONGO AND THE SUDAN)

7. CONCLUSION DEBT USED TO BE A MASSIVE PROBLEM FOR AFRICA DEBT RELIEF HAS HELPED THE MAJORITY ON THE ROAD TO DEVELOPMENT HOWEVER DEBT RELIEF WILL ONLY AID DEVELOPMENT IF OTHER FACTORS ARE NOT CREATING OBSTACLES, SUCH AS BAD GOVERNANCE NEVERTHELESS DEBT RELIEF SHOULD ALLOW AFRICAN COUNTRIES TO BECOME LESS AID DEPENDANT AND ALLOW THEM INVEST IN SERVICES THAT WILL IMPROVE THEIR DEVELOPMENT