Unsustainable Debt Essay -- Economics

Unsustainable Debt Many ordinary citizens today in developed countries such as Canada acknowledge the abject poverty affecting citizens of various African countries and other undeveloped nations. However, exactly why these countries are in this position appears to be a mystery, despite many cash grants, relief efforts, and aid are delivered to these countries by various Western organizations amidst great media attention. In addition, it also seems natural that such undeveloped countries should have a net flow of capital moving towards them from wealthy industrialized nations such as Canada. On the contrary, a net flow of money has actually been directed towards the industrialized nations and various financial institutions from these impoverished countries[1]. This fact has failed to achieve much media coverage, if any. Figures on poverty levels of the early 1950's, following the Second World War, do not reflect those found today[2]. Undoubtedly poverty existed in the world. In fact, both the world's economy and the global GNP figure were far smaller in comparison to present day figures[3]. However, the fact that poverty existed in many countries did not imply that the inhabitants of those countries lacked basic necessities such as food, water, adequate shelter, and basic health services. This present situation of utter poverty is a result of the debts and debt service payments; an enormous burdens on these countries. Far greater percentages of capital and resources are spent each year on interest payments resulting from these debts by the debtor nations than on vital services such as education, health care, and basic social infrastructures[4]. Without the debts and debt service payments, such countrie... ...., 1991) 54. [8] John Serieux. Journeys Just Begun. (Canada: Renoult Publishing Co. Ltd., 2000) 28. [9] Cheryl Payer. Lend and Lost. (United Kingdom: Zeb Books Ltd., 1991) 27. [10] Roy Culpepper. Journeys Just Begun. (Canada: Renoult Publishing Co. Ltd., 2000) 32. [11] Roy Culpepper. Journeys Just Begun. (Canada: Renoult Publishing Co. Ltd., 2000) 33. [12] Gianni Vaggi. From Debt Crisis To Sustainable Development. (Great Britain: The Macmillan Press Ltd., 1993) 117. [13] UN Economic Commission for Latin America. Debt Adjustment and Renegotiations in Latin America. (USA: L. Rienner Publishers, 1986) 34. [14] John Loxley. Debt Disorder: External Financing for Development. (USA: Westview Press: 1986) 162. [15] John Serieux. Journeys Just Begun. (Canada: Renoult Publishing Co. Ltd., 2000) 29.