How borrowing money makes poor countries poorer Poorer countries borrow money off richer countries and their banks. They then have to pay this back PLUS.

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Presentation transcript:

How borrowing money makes poor countries poorer Poorer countries borrow money off richer countries and their banks. They then have to pay this back PLUS INTEREST. But because they are poor, they cannot pay it back in full; they can only pay the interest. So they still OWE the money in the following year. So in the next year they have to pay back the debt. But they cannot. Maybe they can only pay back some of the interest. So they have to borrow more to pay the debt. This extra borrowing will also incur interest on it. So in the following year after that the poor country owes more By borrowing money they get poorer And the banks and governments of the richer countries get richer off the back of this How in any way at all is this fair ?

How borrowing money makes poor countries poorer This video This video shows the effects of the debt on people who live in poorer parts of the world This one This one shows how some people are campaigning to DROP THE DEBT How in any way at all is this fair ?

How borrowing money makes poor countries poorer Debt abolition is when some or all of a country’s debt is ______. This means they can use the money they make to ______ rather than to pay back the debt. For example, Zambia (in southern Africa) had $4 billion of debt cancelled in In 2006, the country had enough money to start a free _________ scheme for millions of people living in rural areas, which improved their quality of____. Conservation swaps (debt-for-nature swaps) are when part of a country’s debt is paid off by someone else in exchange for ________ in conservation. For example, in 2008 the USA reduced Peru’s debt by $25 million in exchange for conserving its ________. For your exam you need to know about DEBT ABOLITION and CONSERVATION SWAPS develop, healthcare, cancelled, investment, life, rainforests