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Debt Crisis

            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.


Essays Related to Debt Crisis

1. The American National Debt Crisis

The concept that relates to National Debt is education. ... Unlike the private debts, there are also promises to pay such benefits such as Social Security, Retirement Pensions and the national debt. ... National Debt is still a huge problem in America. ... Americans are $7.1 trillion dollars in debt. ... The campaign for American Manufacturing sponsors events that spotlight the crisis in manufacturing which are generated by trade policies that encourage imports from other countries. ...

  • Word Count: 1486
  • Approx Pages: 6
  • Grade Level: Undergraduate

2. European Debt - Financial Crisis

The European debt crisis is a recent financial event that has affected many different countries around the world. ... Europe has accumulated a lot of debt and has been struggling to pay their debts back; this has led to a financial crisis. The European crisis was driven by excessive debt and the need for many government bailouts. ... " Shortly after 2009 Europe started to experience the Sovereign debt crisis. ... What is needed is for bad debts to be liquidated. ...

  • Word Count: 1475
  • Approx Pages: 6
  • Has Bibliography
  • Grade Level: High School

3. The Greek Debt Crisis

Since early 2010, the Eurozone has been facing a major debt crisis. ... Much of the debt was from the French and German banks. ... Greece did not actually cut their debts substantially. ... Therefore no debt was written off in 2010. ... A coalition party that proved to be more radical in its approach to the economic crisis. ...

  • Word Count: 875
  • Approx Pages: 4
  • Has Bibliography

4. Bank and Supervisory Responses to the Debt Crisis

It also evaluates whether the banking and supervisory structures at European Union prove to be adequate in responding to the debt crisis. In order to respond to the debt crisis, European Union embraced the need to strengthen the policy coordination between its member states in 2011. ... The financial crisis indicates a serious weakness in the financial sector, as the systematic nature of the framework existent before the crisis was unable to respond to the debt crisis. ... As seen above, the banking and supervisory structures at European Union level have proved adequate in responding to the d...

  • Word Count: 785
  • Approx Pages: 3
  • Has Bibliography
  • Grade Level: Undergraduate

5. Tentative Deal on Debt Crisis

"We're not done yet," Obama cautioned, but he said the compromise would "end the crisis Washington imposed on the rest of America." ... "It ensures also that we will not face this same kind of crisis again in six months, or eight months, or 12 months. And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy," said Obama (Hulse). ... In addition to raising the national debt ceiling, the deal also includes other reforms. ... The ultimate goal is to reduce the debt by an additional $1.4 trillion over ten years. ...

  • Word Count: 803
  • Approx Pages: 3
  • Has Bibliography

6. Foreign Debt

Foreign debt is also referred to as external debt. ... An argument for the rising debt creating problems is the burden of the debt service. ... Recent examples of this include the Third World debt crisis beginning in 1982 and the Mexican crisis of 1994/95. Each crisis is characterised by a currency crisis often leading to a banking crisis, and this is exemplified by The East Asian Crisis where numerous large companies collapsed whilst large amounts of money to foreign economies. ... Therefore, foreign shocks are amplified, and this theory was exemplified by those Asian economies caught in the ...

  • Word Count: 1979
  • Approx Pages: 8
  • Grade Level: Undergraduate

7. Dynamics of the Recent US Financial Crisis

The United Stated financial crisis began in September of 2008 when the most respected financial institutions fell. ... Since the crisis hit in 2008, the world bank committed $196.3 billion to developing countries to provide education, good health, and provided much-needed investments to crisis-inflicted countries. ... Generally, the companies or individuals assets are used to pay down debt and refinance existing debts. ... Lehman Brothers collapsed, while the world's largest financial institution AIG was bailed out and ended up surviving while paying off their debts. World economies ar...

  • Word Count: 1379
  • Approx Pages: 6
  • Has Bibliography

8. Korean Economic

The crisis of 1997-98 has occurred followed by Thailand and Indonesia's crisis. ... There are several reasons for that- the buildup in short-term debt and foreign currency exposure, a highly leveraged Corporate Sector. ... Seeing nonperforming debts mounting and investors had every reason to be worried about the capital they lent to Korea.' The rapid buildup in private short-term external debt created the potential liquidity problem. ... Now, Korea has fully discovered from the financial crisis. ...

  • Word Count: 1251
  • Approx Pages: 5
  • Has Bibliography

9. The World Financial Crisis

One factor that causes this change is a financial crisis. ... Even though this crisis started in the financial sector, it has affected literally everyone. ... Many households were struggling to make payments related to their debts, whether it concerns mortgages or consumer credit. ... Social Conditions Some people argue that the financial crisis has turned into a social crisis. In the EU 27, material conditions improved just before the crisis (between 2003 and 2007) and worsened after the start of the crisis in 2008. ...

  • Word Count: 1610
  • Approx Pages: 6
  • Has Bibliography

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