Symposium 2012: Debt relief for poor countries?

Sydney: There should definitely be debt relief for poor countries. Many of the poorest countries have had decades to pay back all their debt and simply have not been able to do it and there is little chance that they will in the coming decades. In some ways creditors are partially to blame for the situation these countries are in. In a lot of cases lenders gave money to regimes who they knew wouldn’t be spending aid money on the citizens of that nation. So these people are suffering now paying back money they never benefited from in the first place. It is good to see the IMF and various other nations beginning to address the issue of debt relief but the slate needs to be wiped clean if these nations are ever going to give their citizens the life they deserve.

The current situation in Europe shows how foreign debt is destroying the economies of poor nations and affecting all their citizens in a negative way. Paying back debt means that more and more money is being sucked out of the economy which means obviously that the economy cannot grow through investment or other worthwhile measures. This also affects essential services such as health, education and infrastructure. If the people of a nation are poor, sick and unable to travel then there is no hope that they can contribute in a meaningful way to the economy of that country.

Michigan: Here again, as in the previous question, I don’t think money and manpower have resolved any problems. We spend billions of dollars on foreign aid. These countries come to rely on this aid and never try to help themselves. Sounds kind of like entitlement programs don’t you think?
Cartwright: A lot of third world countries or highly indebted poor countries that have been given loans from first world countries will never have the capacity to pay them back, so effectively it’s debt on the books that won’t ever be collected. I don’t object to forgiving foreign debt, but we need something in return. If they’ve got natural resources, we can take a portion of those. If they’ve got a strategic position, they may just need to provide us with outsourced intelligence services or something of that nature.

Greece could be considered poor at the moment given their financial situation. If they or their friends in the EU want debt forgiveness, let’s make a deal whereby they return $10 of our Treasury debt or every $1 of their debt that we forgive. Think there would be any takers?
RMC3: I learned a lesson a long time ago that only lend money you can afford to lose and if you lend it out don’t plan on ever seeing it again. You loan it, and it’s gone. This is pretty much true when you’re talking about highly indebted poor countries. These are countries that really had no way of paying back the debt in the first place, so the loans were really just like giving to charity. And sadly, most of these places don’t have anything to offer to us in lieu of the debt. I prefer to just quit giving any money or loans to other nations. When we’ve got our financial house in order here in America, then we can consider foreign aid and loans again.

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