Debt of developing countries
From The Art and Popular Culture Encyclopedia
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The debt of developing countries refers to the external debt incurred by governments of developing countries, generally in quantities beyond the governments' ability to repay. "Unpayable debt" is external debt with interest that exceeds what the country's politicians think they can collect from taxpayers, based on the nation's gross domestic product, thus preventing it from ever being repaid. The debt can result from many causes.
Some of the high levels of debt were amassed following the 1973 oil crisis. Increases in oil prices forced many poorer nations' governments to borrow heavily to purchase politically essential supplies. At the same time, OPEC funds deposited and "recycled" through western banks provided a ready source of funds for loans. While a portion of borrowed funds went towards infrastructure and economic development financed by central governments, a portion was lost to corruption and about one-fifth was spent on arms.
See also
- Committee for the Abolition of the Third World Debt
- Domestic Liability Dollarization
- Eurodad (European Network on Debt and Development)
- Haiti's external debt
- Jubilee USA Network
- Original Sin (economics)
- Sovereign debt