Grade Level 11 / Cycle2

Course: Economics

Write a summary of the issue (2 to 3 sentences):

The Developing World Debt started in the 1970's. During this time there was an increase in demand for oil. This new wealth was deposited in interest earning accounts in Western banks. In the 1980's the economic situation worsened in many of the developed countries so the interest rates increased significantly. This situation has now become a crisis in some countries: every year, developing nations pay nine times more in debt repayment that they receive from developed countries in aid. It is unfair to the poor countries to repay their debt with high interest when they cannot even sustain themselves.

Be it resolved that developed countries should cancel the debts of the poorest nations.

Write an outline in point form:

• African nations, which are the most indebted, presently spend four times as much on debt repayments than they do on health. Basically, the progress made in health and education during the past 50 years is actually being reversed in some countries.
• Debt repayments punish those who were not responsible for creating the initial debt. These debts were created by the irresponsible spending of dictators in the past, even though most of these dictators have now been overthrown. Yet the new government and its people must now pay the price for the dictator's faulty decisions.

• Huge amounts of money borrowed are not spent properly. Instead of using the borrowed money to develop the country's economy, the money goes to loopholes.
• Poor countries are usually led by corrupted governments. The money borrowed just goes to the pockets of the politicians and the citizens are left in debt. If the cancellation of debt is permitted, the corrupt leaders will become accustomed to borrowing money without repaying. In the end, very few people are benefiting from the cancellation of debts, the corrupt politicians.

• This means raising "cash crops" like coffee instead of food to support their population. Even people in fertile countries can find themselves starving since they cannot even afford to buy the food which has been bought from other countries.
• Sometimes the "cash crops" do not raise enough money so these countries then borrow even more money to pay off their debt. By doing this, they are just digging themselves in deeper because once they pay off the original debt, they are left with new debt plus the interest. This then effectively becomes an infinite cycle of increasing debt.

• The government should use "cash crops" in order to pay the country's debt. The money that "cash crops" bring does not only help in paying debts and interest but also aid in boosting the country's economy. The government should have a reasonable quota on the amount of "cash crop" that should be exported.
• If a country is well suited for a specific crop or business then it should use its resources wisely. It should export more of what it can make better and also import crops from other countries suited for other line of business. Therefore, we support other countries' products while they support ours.

• Since their economy is based on repaying their debt, it is impossible for them to invest in infrastructures and an educational system, which would have helped their country progress and become an industrialized country.
• By canceling their debt, developed countries will have a fresh start and finally the opportunity to create a successful economy for the forthcoming generations.

• Canceling debt will do no good to the poor countries. Instead of trying to stand on their own, their government will borrow more money and not repay them. The corrupt politicians will end up with more money and no helped will be given to country's citizens.
• By canceling debt, poor countries will just rely to the industrialized countries for money. They will not learn to stand on their feet and make use of their brains and their countries' resources.
• Instead of being a great help, industrialized countries will make the poor countries lazy. These poor countries will not even give any effort to survive but rather make the industrialized countries be responsible for them.

• Some of the world's poorest countries are so burdened with debt that they can no longer realistically pay them off, and are now simply paying off the interest. For example, if an individual is unable to repay there debts, they declare bankruptcy and start anew. Countries should have that same option.
• After eliminating their debt, the banks will also be more careful about lending: the banks will then know that if financing a project, which is unlikely to succeed, they will most likely not get their money back. In the long term, if their debt is eliminated, it is better for the citizens of that country to become a contributor to the world economy than to remain a slave to their debt.

• A personal bankruptcy is totally different to a country's bankruptcy. In a personal bankruptcy, the person in debt is able to pay his or her debt by having his/her assets seized by the bank. In a worldwide term, it is unfair for its government and its citizens to lose control of all the country's resources.
• After canceling the debt, no country will lend money to another country. There is no point of lending because it will just be canceled again and the lender will not get anything from it. It is like working for something and not getting or earn credits.

Who is the author/creator? Vanessa Baird

What is the title? The Third World Debt Crisis

What is the format (book, website, CD-ROM, magazine, etc.) ? website

When was it created (year of publication or creation)? 1998

Where did I find it? http://www2.gol.com/users/bobkeim/money/debt.html
(if website, write the address)

Who is the author/creator? Nick Mathiason

What is the title? Poor nations hit by debt relief with strings attached

What is the format (book, website, CD-ROM, magazine, etc.) ?

When was it created (year of publication or creation)?
Sunday April 20, 2003

Where did I find it?
http://www.jubilee2000uk.org/worldnews/africa/malawi200403.htm
(if website, write the address)

"This process of global production helps rich countries in terms of lower-cost products and poor countries by creating jobs, experience with advanced technologies, and investment. Eventually, a poor country can "graduate" from being a mere supplier of components to becoming an innovator."

Argument: For the motion
Source:
http://www.wto.org/trade_resources/quotes/development/development_1.htm
Author: Director of the Center for International Development Harvard University, Jeffrey Sachs
Title: Quotes on development

"Many poor countries are crippled by corrupt and incompetent governments and economic systems. Canceling debt would therefore make no difference: it would simply be the equivalent of giving a one-off payment to dictators and crooks, who would siphon off the extra money and become rich while the people still suffer."

Argument: Against the motion
Source: http://www.debatabase.org/debatabase/details.asp
Author: Bobby Webster
Title: Developing World Debt

Wouldn't eliminating the debts of poor countries be a splendid idea since it would ameliorate the standard of living for various poor countries?

Won't countries take advantage if they know their debts will be eliminated?
Would the citizens who are suffering get the money or the dictators?

Term: debt

Definition: an amount of money, a service, or an item of property that is owed to somebody. It is an obligation or borrowing

Definition: poor countries that are developing countries. These countries don't get the proper nourishment, education and health care.

Definition: a small mistake or omission in a rule or law that allows it to be circumvented.

Definition: a leader who rules a country with absolute power, usually by force. Somebody who behaves in a tyrannical way.