Third World Debt
The debt of developing third world countries is external debt incurred by governments of developing countries, generally in quantities beyond the governments' political 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 the debt from ever being repaid.Debt has crippled many developing countries. Often based on loans taken out by prior rulers and dictators (many of which various Western nations put into power to suit their interests), millions face poorer and poorer living standards as precious resources are diverted to debt repayment. Natural disasters have also contributed to third world debt.When the 2004 Indian Ocean earthquake and tsunami hit, the G7 announced a moratorium on debts of twelve affected nations and the Paris Club suspended loan payments of three more. By the time the Paris Club met in January 2005, its 19 member-countries had pledged a total of $3.4 billion in aid to the countries affected by the tsunami.
The debt relief for tsunami-affected nations was not universal. Sri Lanka was left with a debt of more than $8 billion and an annual debt service bill of $493 million. Indonesia retained a foreign debt of more than $132 billion and debt service payments to the World Bank amounted to $1.9 billion in 2006.
The debt relief for tsunami-affected nations was not universal. Sri Lanka was left with a debt of more than $8 billion and an annual debt service bill of $493 million. Indonesia retained a foreign debt of more than $132 billion and debt service payments to the World Bank amounted to $1.9 billion in 2006.
Sources
http://www.context.org/iclib/ic32/coledebt/
https://www.mtholyoke.edu/acad/intrel/globdebt.html
http://en.wikipedia.org/wiki/Debt_of_developing_countries
https://www.mtholyoke.edu/acad/intrel/globdebt.html
http://en.wikipedia.org/wiki/Debt_of_developing_countries