Slides in this set
· A Debt is an obligation that is owed by a debtor
to the creditor.
· A debt is created when a creditor agrees to lend
a sum of assets to a debtor.
· Debt is usually granted with expected repayment,
plus interest for the term the debt is taken.
repayments spending…read more
Why should we cancel debt?
Debt can create a negative multiplier effect (a poverty trap) and
if debt is not cancelled the cycle continues and grows.
Lack of investment
in industry or social Lack of
High interest Forced to cut with to repay
rates still public IMF/World debt.
likely. spending. Bank.
Likely to fail. Enough time to kick Another
Left with start the economy and, loan to
twice as hopefully, make enough repay debt.
much debt. money to repay debt.…read more
Advantages of cancelling Debt:
· Leaves more money to invest in social projects (health
and education) and infrastructure.
· Makes a country's economy more competitive.
· Improves potential for investment from other
countries and possibility of developing trade.
· Allows less emphasis on generating income from cash
crops or commodities for export, which in turn are
less likely to influence deforestation, land
degradation, production of greenhouse gasses and
· Some developed countries accused of protecting their
own interests by setting conditions on debt
cancellation with particular countries.…read more