Humongous Debt Essay

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Globalization has not come without fault especially for the poor and underdeveloped nations. Whilst for most of these nations growth has been recorded in their economies, technology has improved and opened up a whole new world market, unfortunately on the flip side they have paid a high price for it in form of crippling debt. Humongous debt is one negative consequence that has resulted from globalization as nations struggle to trade on the international market in a bid to earn the so much desired foreign exchange and also access goods that are not available in their own nations. The truth of the matter is that no country is free of debt in the world today, even the so-called rich countries are indebted to one another, however; the difference …show more content…

From a business perspective, you do not lend money only to write it off when the client has accumulated so much interest on it. That is a loss, so you try as much as possible try to recoup what you can. I find it somewhat incredible that the borrower should dictate when the debt should be written off as bad debt. The debt reduction activists have branded the IMF and World Bank loan conditions as evil, a form of imperialism etc. but my perspective, the recipient nations of these loans are without fault too. For instance, when the SAPs of the IMF recommend that the government privatizes the mines, they do not tell the government how to do it. They simply recommend that government allows the private sector to grow the investment rather than the government who may run such corporations at loss and out of obligation decides to maintain people in employment by subsidizing the entity. In the private sector, the entity would be restructured, lay off excess staff, merge positions etc. to make it more competitive and profitable. However, with limited foresight, governments usually take wrong decisions hurting their citizens who in turn react with protests and destabilize the governments politically and

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