4 December 2014
Chapter 9 # 3
With all of the debt that many countries have throughout this world it makes disasters for the economic, social, and ecological systems. Many countries such as Zambia, and Pakistan are in debt for billions of dollars with no way to repay. These countries that are in debt are having trouble repaying the debt because the money they borrow has a growing interest set at a certain amount that grows back over time and if not paid back it adds on to your debt. The government came up with different ideas to try and help the developing countries lower their debt, but the fact was it was hurting their environment and they were taking all of their resources. The three ideas that the government had were one to have crops exported to them that they would be able to sell abroad and make money which would be taken off of the debt that they owe. The second one is that in these countries they are going to lower the government expenditures so the income can go to pay off the interest they owe. With the government making this decision it will make the poorer countries or the one in debt worse off because they will be losing funds for schools, health clinics, building and road maintenance and the police protection will be lowered. The third and final idea is to have a rapid exploitation of natural resources to make quick cash. This means that they will be cutting down trees, and extracting minerals. All of these ideas that the government has for the countries in debt are a great way for them to lower the debt that they owe and pay back their interest, but the big thing that is a problem with all of this that they are hurting the environment. Cutting down trees, taking crops, extracting minerals, and much more are bad for the environment, but also it is leaving the countries with low amounts of resources. They decided to make a group called the Consultative Group to Assist the Poorest, which lends a small amount of money to the people with very little. This will help some of the poor families at least have a little to get food or clothes. They also came up with the Multilateral Debt Relief Initiative that address the debt of low-income developing countries and gives them debt relief if they qualify. By 2011 32 countries qualified for debt relief. Donor countries have offered to help out the countries in debt by giving them grant-type aid. This help some of the countries in debt, but there was a problem after some time. The problem was that some the countries giving the grant-type aid actually fell into a recession leaving them in a crisis. This meant that these countries would no longer be able to help out with the countries in debt. So yes trying to help other countries out might be a good thing at the time, but in the long run you are really hurting yourself.