The Third World Debt Crisis - 1740 Words

As of now there are many third world countries that are in debt and the one that I am going to be focusing on mostly is Africa. The third world debt crisis has to do with some of the poorest countries around the world that are in deep debts because they are not able to pay back loans that they were given to a while back. It is very hard for them to come up with the money and as time goes on little by little the amount keeps on increasing. This debt started back when first world countries had very large amounts of money and went ahead and loaned a good amount to the third world countries for development projects but now they have fallen behind in trying to keep up with their payments. In the Journal Cleaning up Third World Debt Without Getting Taken to the Cleaners it mentions the amount of debt these third world countries are in. Bulow and Rogoff write, â€Å"As of mid-1989, the highly indebted Countries owed roughly $300 billion to commercial banks in government and government-guar anteed debt (p. 32).† As I kept reading they talked about different assumptions they came up with, about how and what they are going to do. One assumption was how once two-thirds of their debt was forgiven by having others help out; the countries with the most debt would have to pay off the rest. Many people would agree that it is not right for the third world countries to be paying debts that they aren’t able to pay for. They would have to give up pretty much everything to try and pay theShow MoreRelatedCauses for 1980s Debt Crisis Essay905 Words   |  4 Pagesbackground and causes of debt crisis in late 1970s and 1980s. The debt crisis was know as financial crisis and defined as a point of a countrys foreign debt accumulation exceed its earning power and the country has no ability to repay the debt. 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