Debt is a healthy act for developing countries to improve their country's economy and the welfare state of the citizens. For many years debt was the solution for third world countries but this solution has become their biggest problem today. Loans are adding up and third world countries are facing problems of paying back the amount they owe. The origins of the debt date from the mid 70's and particularly the first oil price shock (Cline, p.13). The debt crisis then became a consequence of funds that were borrowed when inflation was high and interest rates were low. This crisis was viewed as a temporary problem at first, but today the debt crisis has been recognized internationally. Solutions have been presented to end the ongoing crisis which will be discussed in detail throughout this paper. This paper will discuss whether debt relief will address the needs of highly indebted countries? Solutions and their effectiveness will be presented and my argument is that debt relief is a definite solution to HIPC, debt forgiveness was found to be the most affective.
There are serious problems in many developing countries, such as unemployment and poverty. Many have huge debts which they cannot pay. Each country has a different financial problem which requires different solution. I feel that this debt crisis should be a concern to everyone. With the opportunities we have today, our education and our technologies people should not be suffering and countries should not be labeled "Third World" countries. The whole nation should join as one and help build developing countries around the world as well as impose change in the future.
According to Peters and Dents the Jubilee 2000 campaign seems to be a good way in assisting developing countries with their debt crisis. The sole purpose of Jubilee 2000 is to increase the support for changes in financial systems and parts of the debt should be remitted.