Talk:Debt relief

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1 Arguments against debt relief
2 arguements for
3 arguments against
4 To whom is the money owed?
5 For/Against
6 External links

[edit] Arguments against debt relief

Some of the reasons which were given here against debt relief are simply incorrect:

Relieving debt would not make much difference to the really poor, as they are not the ones who owe.
- WRONG! Debt relief can make a profound difference to the really poor, as the countries who benefit from debt relief can spend more money on social programmes (health etc) rather than interest payments.
  - That is the opinion of some (enough to be notable) people, you may not agree, but you cant just delete others opinions. and it is TRUE that the poor arent the actual ones who ow the money, after all, much off it went to africa then straight back to swiss bank accounts Bluemoose 08:09, 27 Apr 2005 (UTC)
    - This argument for debt relief is that rescheduling or cancelling debt will allow poor countries' governments to invest in the infrastructure of the economy, providing a platform from which national income can rise, meaning debt payments can be made in future. But in practice developing countries' governments have a tendency to discount the future, and divert any additional monies from debt relief into consumption spending rather than investment, which does not help the economic infrastructure and therefore provides no basis from which to pay future servicing. -crafty bison, 17 Feb 08
If debt were to be suddenly cancelled, it could cause such disruption in the developed world the negative effects could also be felt around the world.
- Billions of dollars of debt have been already been written off. There has been no disruption.
  - Again, cant just delete others opinions. Bluemoose 08:09, 27 Apr 2005 (UTC)
    - This is a very vague argument with no theoretical foundation! There WAS an argument in the 1980s that the debt crisis could bring down the Western financial system, but it has since been shown that this would not be the case. 'Sudden' debt cancellation would introduce economic instabilities, yes, but the world is already a highly unstable economy and this would be relatively minor in magnitude. -crafty bison, 17 Feb 08
By cancelling debt, banks and other organisations would be much less likely to lend again in the future, which could be very damaging to countries that need capital to trigger development.
- The vast majority of the debt cancelled worldwide was owed by developing countries to the World Bank. The shareholders of the World Bank are in effect rich western governments. This is not the same as loans from private banks.
  - Yes, but the private banks still count. again, dont just write off well known ideas that you dont agree with. Bluemoose 08:09, 27 Apr 2005 (UTC)
    - It is true, though, that the 'creditworthiness argument' (Susan George/Stuart Corbridge) is founded on abstract notions. The evidence suggests otherwise: debt cancellation SHOULD let governments build a platform on which investment will bring returns, therefore commercial banks will lend again. -crafty bison, 17 Feb 08

TreveX 02:43, 27 Apr 2005 (UTC)

Hi, please note that Wikipedia is an encyclopedia; it is not a place to debate issues. Remember NPOV. Best, Meelar (talk) 02:44, Apr 27, 2005 (UTC)

- Exactly, an encyclopedia holds facts, some people have ideas that others disagree with, but they are still valid when represented as (widely held) opinion. Bluemoose 08:09, 27 Apr 2005 (UTC)

Meelar - the article improvement process requires what some users see as problems with articles to be raised and ironed out on the Talk page. Of course, Wikipedia is an encyclopedia. But should we not discuss problems with those articles in the talk pages? To discuss the article here is surely better than to delete sections without explaining why.

There are many criticisms of debt relief made by economists and other observers which are logical and valid. However, many of the things which were listed here were simply misconseptions which are countered with a cursory examination of the facts - for example the idea that debt relief causes chaos in the developed world. The rewording of the moral hazard argument is much better - please note I did not delete this.[1] I am sorry you think that I was just deleting other peoples' opinions, but I was just trying to make the article more accurate. I do agree with you that there needs to be a section on arguments against debt relief. TreveX 11:19, 27 Apr 2005 (UTC)

OK, thanks for maturity of response, for what its worth I do think relief is a good thing, but feel that a one sided arguement is worthless to the cause. Anyway shall wee then draw up a list arguements for/against on this page terms? we can then avoid an edit war on this controversial topic, italics is taken from artical:

The link in this section to "trickle-down effect" should link to "trickle-down economics" as the linked article contains information about a marketing phenomenon 87.194.20.162 15:00, 18 May 2007 (UTC) Sian

[edit] arguements for

Supporters of debt relief argue that it should be removed for a variety of reasons. Much of the debt was incurred by different governments than currently rule the debtor nations; supporters feel that a new goverment should not be left with the tab of a deposed dictator, especially since theft by departing governments is often practiced, rather than investing the loans into useful infrastructure for the country itself. In addition, they claim that development of the third-world recipients will help the global economy

"Africa alone, if relieved of their debt obligations, could use the funds "to save the lives of millions of children by 2000""[2]

Some facts and figures [3]
Criticisms of HIPC [4]

Examples of how debt cancellation works

In Benin, 54% of the money saved through debt relief has been spent on health, including on rural primary health care and HIV programmes.
In Tanzania, debt relief enabled the government to abolish primary school fees, leading to a 66% increase in attendance.
After Mozambique was granted debt relief, it was able to offer all children free immunisation.
In Uganda, debt relief led to 2.2 million people gaining access to water.

TreveX 13:43, 27 Apr 2005 (UTC)

[edit] arguments against

Opponents of debt relief argue, however, that forgiving the debt would create a moral hazard for debtor nations — that is, it would encourage them to take on excessive debt in the future, confident in the fact that they would be bailed out by Western creditors. They also claim that it would be unfair to third-world countries that managed their credit successfully.

"The London Times denounced the campaign as "a senselessly impulsive gesture", saying that "it could only ever provide a tantalisingly short-term sense of progress"".

To put this in perspective, this was written in 1999, probably by a columnist (i.e. an opinion rather than hard facts - I am trying to find out). I am a Brit and I know there is no way the Times would claim this now. Still, it should be mentioned, but in context. TreveX 13:56, 27 Apr 2005 (UTC)

"They (IMF and World Bank) also insist that they shouldn't be blamed for the debt problem." [5]

Quote: "WHO IS AGAINST DEBT RELIEF: The big global lenders, the IMF and World Bank, are not; indeed they are pursuing more debt relief. But they argue that cancelling debt altogether would encourage wealthy countries to stop lending and to cut aid budgets still further. They also insist that they shouldn't be blamed for the debt problem." TreveX 13:56, 27 Apr 2005 (UTC)

"Why debt relief will not benefit poor" [6]

"I think it's probably true that there would be a minimal adverse effect on creditor countries," [7]

I deleted the example of Uganda on the page due to the fact that debt relief savings are channeled through the Poverty Action Fund, which is overseen by representatives from government, national nongovernmental organizations, churches, unions and international organizations. This thereby ensures that savings from debt relief are not used for military spending, thus making the argument posted not applicable.

[edit] To whom is the money owed?

To whom the money is owed seems to be glossed over with alot of passive voice. The IMF and the World Bank seem to be owed, and institutional banks, but this is not really clear.

In arguments against I would add that this may be yet another taypayer scam of back scratching between big business and government in order to pay off poorly thought out, or politically motivated bank loans. In this case it is actually a transfer of money from the poor (the taxpayer) to the rich (the banks), in stead of the other way around as it is portrayed.

I would argue that to who the money is owed is not in fact the World Bank and IMF, but the people of the country. Loans were often given out irresonsibly to dictators of countries and used not for the people of the country but for the ruler's own personal use or to oppress the people. This is a legal term called odious debt. Iraq's debt was cancelled under this principle--that the people of the country should not be made to pay for the crimes and extravagence of past leaders. ---

I find it hard to believe that somebody would just "forgive" billions of dollars in owed money. There must be some sort of advantage for the creditors. Perhaps debt is forgiven in exchange for something else? —Preceding unsigned comment added by Zybez (talk • contribs) 02:09, 30 May 2008 (UTC)

[edit] For/Against

Please put reasons for each case.

[edit] External links

I have rermoved the following links from the article per WP:EL. If any of these websites were used as sources for text in this article, please link them to the appropriate text in the article by using reference tags and a reference list. See WP:Footnotes. --SueHay 03:54, 7 June 2007 (UTC)