Should Rich Countries Forgive All Poor Countries’ Debts?

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Table of Contents

Rich and Poor Countries
Poor countries
Forgiving their Debts
Poor Countries’ Responsibilities
Works Cited

Rich and Poor Countries

Rich countries should not forgive poor countries all their debt since their poverty is not the responsibility of the rich countries, which when forgiven risk failing to use forgiven debts to revive their economies, but need to establish the underlying reasons for their poverty and fix them.

Thus, instead of forgiving the poor countries the debts they have accumulated, the rich countries should reinvest the money to address needs of their poor people by lessening taxes, investing in infrastructure development, and in reviving their economies. However, poor countries are poor because poor government policies such as poor planning into the future, lack of jobs and a poor population, and irresponsible government and people in general. Thus, rich countries should not forgive poor countries their debts.

Poor countries

The poverty that ravages poor countries is not the responsibility of the rich countries. According to studies by Bailey (1), poor planning by policy makers in many governments of the poor countries, is one of the most significant factors affecting the level of poverty of the governments and the level of poverty of their people. Bailey (1) argues that many governments, instead of working to alleviate the poverty levels of their people are working hard to make more people poor and to keep them poorer.

That is reflected evidently in the poor planning policies these governments and people in government have adopted as their monetary policies. According to Barkley (1), poor countries need to plan their economies well in relation to issues of investment, thus come up with economic systems that address investment approaches, which help to consolidate resources effectively and efficiently.

An economic system is viewed as an amalgamation of different sectors concerned with the production and allocation of resources, which provide economic inputs and outputs in their interactions to form an economic entity. In addition to that, the economic systems use available resources, which are scarce to address the economic problems by allocating the resources effectively and efficiently.

However, poor countries have critically failed to use the scarce resources effectively and efficiently due to their failed economic planning policies. In agreement with the assumptions of Bailey (1), poor countries fail to plan well in the allocation of resources in infrastructure development, in the payment of debts, in the creation of jobs, and in poverty reduction projects, thus causing further poverty in government and in their people.

On the other hand, Bailey (1) confirms that rich countries always consider it a critical issue to plan well and effectively and efficiently allocate the scarcely available resources, thus, the problem of poverty with poor countries in not the responsibility of rich countries.

Thus, poor countries should make every effort to plan well, establish the reasons behind the mistakes in their planning policies, and formulate methods of addressing these problems to overcome the problem of poor planning and eventually fight the prevailing poverty.

Studies show that effective planning leads to affordability of life and associated cost of living, effective and efficient utilization of resources, higher employment rates, and improved business activities, higher levels of production and improved productivity, and sustainable tax burdens. On the other hand, despite the heavy debts poor countries are experiencing, there is the risk that when forgiven the debts, the money accruing as a result might not be well used.

Forgiving their Debts

There is hardly any evidence showing that if poor countries are forgiven their debts, the money generated could be used to alleviate the poverty of the governments and the poor people. Bailey (1) has observed that many of the poor countries continue to be poor and the poverty levels of the poor continue to rise.

That is despite the debts forgiven these countries. Typically, the main reason for the failure of the poor countries to address their problem of poverty is mainly due to poor planning. Thus, making it important for rich countries to seek for an alternative use of the money generated from debts payment by the poor countries. One of the most important alternatives is to address the needs of the poor people in rich countries.

It has been shown that even rich countries have poor people and to address their needs, it is important for the rich countries to plough back the money earned from loan repayments in infrastructure development and any other projects that lead to the creation of employment. Harris (1) views economic development from the perspective of investing money from debt repayment as a direct cause for reducing inequalities on income levels, thus reducing the poverty of poor people in rich countries.

Thus, instead of levying and increasing taxes on the people in rich countries to support social programs and other necessary funding for economic sustainability, the money could be used to curb tax rises, and lead to economic revival. The ripple effects could be infrastructure development, job creation, and poverty alleviation in the rich countries. Thus, poor countries should take responsibility of their poverty.

Poor Countries’ Responsibilities

Poor countries are responsible for their poverty, as mentioned elsewhere due to poor planning policies, which have evidently been the result of the ravaging poverty experienced in the poor countries. Poor planning in government and the people is shown evidently by the lack of decision-making organs run by well-trained personnel in economic planning to stimulate employment that eventually leads to increase in income levels in households.

In addition to that, poor countries fail to that, poor planning has lead the failure of the countries fail to focus the resources for the future development of the countries and fair and planned allocation of the money, taking advantage of money resulting from forgiven debts to plan well for the future.

Typically, the governments, as well as the people do not have plans or policies to plan in view of the resources available, but the people in these countries have such high birth rates that are not commensurate with the economic development of their countries, thus creating more and poorer people (Harris, 2).

One of the problems experienced by the people in poor countries that point toward rich countries as direct causes of their poverties in high birth rates is lack of employment, poor allocation of resources to address the plight of the poor.

Thus, it is a combination of the poor planning of the people such as in giving birth to many children whom they cannot afford to feed because of lack of jobs, and the governments due to poor planning policies. However, there is a string need for improved planning of the resources to avoid blaming rich countries for their plight.

Thus, rich governments should not forgive poor countries their debts, but instead should use the money to address the needs of the poor people in rich countries.

Works Cited

Barkley, John. Comparative Economics in Transforming World Economy. MIT, second edition. 1991.

Bailey, Ronald. Poor Planning. Reasomn.com. 2002. Web.

Harris, Jonathan, M. Basic Principles of Sustainable Development. Global Development and Environment Institute Working Paper 00-04. 2000. Web.

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