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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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#RejectFinanceBill2024 protests in Kenya – When austerity leads to human rights violations
"Tumechoka!" - "We are tired!" For days, thousands of Kenyans across the country have been protesting against the planned tax increases on essential goods and services. Under the hashtag #RejectFinanceBill2024, young people in particular have called for peaceful protests on social media such as TikTok, Instagram and X (formerly Twitter).…
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CREDITOR COORDINATION IN DEBT RESTRUCTURINGS: REPORT ON THE EXPERT ROUNDTABLE “BRINGING ALL CREDITORS ON BOARD!”
The first debt restructurings in countries of the Global South following the COVID-19 pandemic have shown that the coordination of the many different creditors hinders a rapid and sustainable solution of debt crises in view of the significantly more complex creditor profiles. A pattern can be seen both in the…
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