Should the debt carried by the developing nations be cancelled?
I don't believe that cancelling debt for developing nations without some clear guidelines would be good. But with clear guidelines it is a very good tool that more prosperous nations can use to help developing nations. The key is that the nations must take steps to change the past directions within their countries that have lead to the current problems. Once they have demonstrated a clear commitment to change then I believe it is very appropriate to forgive some of that debt.
Most of the developing nations have serious debt burdens. Many of these debts were run up by dictators and corrupt governments decades ago, and the people never benefited. Other loans were actually pushed on countries by former colonial powers. Nearly all of them are so high now that they are logically nearly impossible to repay without bankrupting the developing nations. The West should remit these debts because they are unjustly punishing people who did not take them on in the first place, and who need the money for much more important things.
Every nation on this earth is responsible for its actions whether they be military, social or economic. The world's economy is a fragile thing as shown true by the current economic recession that the world is going through. It's imperative to both nations and individuals to pay off their debt. The banking system requires the prompt payment of debts or else it will implode. Therefore nations should be responsible for their historical debt.
2004 World Bank/IMF study found that in countries receiving debt relief, poverty reduction initiatives doubled between 1999 and 2004. Tanzania used savings to eliminate school fees, hire more teachers, and build more schools. Burkina Faso drastically reduced the cost of life-saving drugs and increased access to clean water. Uganda more than doubled school enrollment.
A developing nation will merely stay 'developing' as long as it carries the crippling debt with which it is saddled. If the United Nations canceled these debts, it would allow developing, third-world nations to have time to grow economically, and help all its citizens prosper. As a helping hand to those in need, the United Nations should cancel the debt of most poor, developing nations.
Developing nations have been used and abused for decades. Their economies have been linked with that of industrialized nations mostly in ill faith, incurring debts they could never possibly pay off which in return enslaves them to the other nations. Canceling their debts will allow them some form of independence to first world intervention.
Debt relief should be given. If debts are not canceled, the developing nations will become poorer. Society moves on, right? Well, as the developing nations become poorer, developed nations become richer. Then, the developing nations will not be able to compete with such high up and wealthy nations.
Not only do I think it is important for a developing country to keep their debt, so they can effectively learn to manage it as they grow, but I think cancelling debt from developing countries would discourage developed countries from investing in them.
Every nation was, at one time or another, considered a "developing" nation. Each of them has had to pull itself up by its bootstraps and get to the point that it is now. If other nations step in and relive a developing nation of its financial obligations, where is the growth? On a small scale, if a child's parents bail the child out financially, cleaning the slate so to speak, what has the child learned? The answer is that nothing is learned. A person or nation in debt has to learn the correct strategies to budget and plan for the future. A financial bailout provides no lessons and ultimately places the nation back in the position it was in before the assistance.
They should have the debt restructured, and have it paid in economic gains, such as an increase in jobs that would count towards a lower interest rate. The undeveloped nations should have help to take care of their people, and work together to make a true global economy. They should receive technology, teachers, and expert professionals, instead of money.
While it is certainly true that developing nations are less able to afford debt, the fact is that canceling their debts will leave their creditors in the lurch. What should be done is for their debts to not accrue interest, which will still allow the creditor nations to recoup some of their loaned money, while at the same time not crippling the developing nations with massive debts.
Developing nations should pay back their debt. Many developing nations are rich in natural resources, such as gold, minerals and oil. With proper management, developing countries could pay back their debt easily. Instead of being corrupt and increasing their personal wealth, the leaders of these countries should properly manage the country so that the citizens' standard of living would improve and the debt of the countries could be paid.
Every sovereign nation is accountable for the budgets they propose, the trade deals they make, the financial negotiations they make with other nations. Every nation has a responsibility to be financially responsible. If they don't pay back their debt, this hurt's the world financial markets, and it sends a message of irresponsibility.
If the debt carried by developing nations were cancelled, then later on in their development, or even after they have finished developing, they would feel it would be possible for their debt to be cancelled again. This might even affect other nations asking for their debt to be cancelled, by seeing it happening in other countries.
Several years ago, the USA cancelled the debt on several developing nations. It didn't help at all - when the cost of gas increased, the developing countries' debts jumped back up again. Instead of letting debt build up and then forgiving it, we should work to help the countries from falling into such bad debt in the first place.
When a developing country owes money to other countries, it should be repaid. When a country owes a debt, they need to pay it back to ensure that they don't put the other country under, while only worrying about the own selfish needs of their country.
It is wonderful that the US is willing to help out wherever they can, however, I do not feel that the debt to the developing nations should be cancelled because there would be an issue as to who is considered a developing nation. It would be hard to draw the line and the countries that just miss it would be quite upset and could cause problems. I do feel we should give them some breaks though.
If the debt which has been given in the past to the developing nations is canceled or written off, then it would create a bad precedent. After all, no money should be taken as `Easy Money' and the developing nations thus must pay back their loans; however in case of emergencies like a natural disasters, the debt should be rescheduled or a refinancing could be arranged but they MUST pay back the loan eventually.
Too often debts incurred in developing nations are not by the people themselves but by corrupt government officials who steal the money and pass the debt on to the poorest of people. Why then should the common people of a nation be forced to pay the debts and crimes of thieves and politicians? Many of the poorest nations remain poor because of the crushing debts instigated by these crimes and lending nations and banks refusal to differentiate the corruption of individuals for legitimate debt.