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provision of loans to LEDCs should be finished

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Voting Style: Open Point System: 7 Point
Started: 10/13/2013 Category: Economics
Updated: 3 years ago Status: Post Voting Period
Viewed: 1,135 times Debate No: 38740
Debate Rounds (2)
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yes, the provision of loans should be finished because these loans are a major reason for countries to stay underdeveloped. the countries should be encouraged to help themselves to rise and get a place in the world market that will help them become truly independent.

Once a country gets into debts they are hardly ever able to pay them back that creates a lot of problems to the people living in that country as they are the one who have to give taxes.

then not all the politicians are good enough to utilize the money for the betterment of the country but they put the money into their pockets and demand for more funds. so i say that yes, the provision of loans to the LEDCs should be abolished.


I acknowledge that the rates of interest on loans to LEDC's has in some cases hindered the development of those countries. However, I believe that loans to LEDC's are the fairest and most effective way of helping underdeveloped nations grow in terms of agriculture and industry on the international stage.

For a start, there is negligible chance that an underdeveloped nation will be able to freely compete on the international stage considering the relative dominance of Europe and the Asia Pacific, as shown by the first graph on
This oligopoly means that the chance that an underdeveloped nation has in raising the profile of its current accounts using only internal sources is very small indeed.

Also, there are some countries who have really benefitted from the provision of loans from MEDC's to LEDC's. Egypt pre- Arab Spring is an excellent case to look at. Traditionally, Egypt has always had a large workforce but not the investment or government budget in order to put these workers into jobs which shall aid the progression of the nation from LEDC to MEDC. Large loans from the United Kingdom, amongst other countries allowed for large-scale projects such as the Aswan Dam. It is fallacy to believe that Egypt would have been able to find the $1 billion required in order to finance such a project. From that stage in the late 60's, Egypt has gone from strength to strength and is now considered as a future player on the world stage. The Arab Spring has dampened such aspirations but their progress using international loans is undeniable.
Debate Round No. 1


That is not the case for all the LEDCs in the world, once they have taken loans they are in a kind of threat for the time their being in dept. There are many countries that once take a large amount of loans from a country are then unable to pay it back and meanwhile they also need to develop and then they increase taxes and give a tough time to the population. I although agree for the example you have given of Egypt but same can not be said for all the countries. I live in Pakistan, we are a LEDC and we are taking more and more money every day and becoming more and more corrupt every day, as a result to this we are in heavy debts and now we cannot pay back or rather don't want to pay them back, i know exactly how much problems those debts are causing to the people here. Now that we cannot pay back the debts, we have to take all the cruelty that is being done to our people such as the drones in which innocent people are getting killed for no reason at all. If today some how we are able to pay back the loans and then not allowed to take any more of it, using the current economy, we can develop but never with the free provision of money by others that later cost the lives of many.


I entirely agree that Pakistan has not really benefited from the loans which are provided by MEDC's. The problems for why they have not worked are very complex thanks to the strategic importance of Pakistan in the region. However, loans alone cannot be blamed for the problems suffered by Pakistan. For a start, how could Pakistan really compete with the expanding influence of the Indian economy on the world stage? Foreign investment is often frowned upon for Pakistan as the region in general is unstable and the reputation that Pakistan has as a hotbed for religious fundamentalism (deserved or not) really does not help with national development using foreign funds.
But loans and grants from MEDC's to LEDC's must be continued in order to give nations the opportunity to develop without meeting the humanitarian problems of nations such as China. How else can nations develop in this day and age in a world community which is in almost unanimous agreement upon the concepts of capitalism.
I shall also point out that that there is now a lot of different criteria that nations must meet in order to qualify for a loan. A list of these criteria can be seen in the link below:
Since the year 2004, the countries being lent funds have had a very good track record of repaying those funds to the IMF or international aid which is provided by the more advanced nations. Of course there are going to be cases where such aid does not fit the country's situation, but this does not mean that aid that could benefit millions of people could and should be cut off.
Debate Round No. 2
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