Should the rich nations forgive debt to the developing countries
Debt is one of the most serious problems of today’s developing world . Every year, developing nations pay nine times more in debt repayment than they receive from developed countries in aid. Latin America owes around $530 billion in debt, which is about 36% of its total GNP; Sub-Saharan Africa owes around $200 billion, 83% of its GNP (http://www. ... The debt is kind of a deadlock- interest accumulates rapidly while new loans are taken to repay the debt. Some argue that cancelling debt is of no help- it is just short-term measure and new debt will appear soon. However, there are many facts that show us the neccessity of some degree of debt relief. In my paper I advocate forgiving the debt to third world countries. Nevertheless, cancelling debt without any commitment for indebted countries seems meaningless to me. Both developing and developed world should be able to benefit from forgiving debt.