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To finance development, many poor countries have to take recourse to external loans. By itself this is not bad or dangerous because the debt can be used to , f. i., invest in infrastructure, raising the output of the economy.

But if loans are taken and given without considering the economic capacity of the debtor, the repayment could become a problem. In the 1970s and 1980s this led to the so called “Third World Debt Crisis”. Today we can observe a similar trend: Poor countries in Africa, Asia and Latin America have comparatively easy access to fresh money because low interest rates in the Global North make investments in the Global South very attractive.

Rules for responsible borrowing and lending are important since they make clear, that creditor and debtor share responsibility for the success of the lending operation.

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News

  • 12.4.2017

    Debt Relief in Baden-Baden

    20 people dressed in the flags of the Debt20-countries, about 150 activists, many journalists and camera teams and – as expected – not one finance minster to perform a symbolical debt relief. Jürgen Kaiser, who is the policy coordinator of Jubilee Germany, held a speech directly opposite the Baden-Baden “Kurhaus”…

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  • 17.3.2017

    Global Sovereign Indebtedness Monitor 2017

    The article lists debt indicators for all those countries that show debt indicators above critical thresholds for end-2015.  It shows that 116 countries in the Global South are critically indebted, which is 33 more than only two years ago. The highest average debt indicators are shown by affected countries in the CIS /…

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