The Impact of Debt on Developing Countries

Developing countries face a heavy burden of debt, with three out of five low-income countries struggling to pay their debts. This problem is particularly acute in Africa, where 21 countries are either bankrupt or at high risk of debt distress. The debt prevents countries from investing in public services and infrastructure projects, leading to a cycle of debt and declining economic prospects. One solution is debt relief, which would wipe the slate clean and allow countries to invest at home. However, critics argue that debt cancellation creates long-term consequences and poses challenges for private investors. It is essential to find a balance between borrower and lender responsibility and reform the global debt system.