IMF

HIPC In the 90’s, developing countries wanted “unjust debt” to be demolished. Unjust debt is debt that a country has built up because of developed countries taking advantage of it, during times when that country needs money. So therefore, the World Bank Group put together ways of relieving these countries of such debt. One way they tackled this was by forming the HIPC (Highly Indebted Poor Countries Initiative). In the late 90’s, the IMF assessed this initiative and improved it. The HIPC allowed a greater number of countries to be eligible for more debt assistance. Furthermore, more creditors helped these countries, by giving them temporary debt relief.

HIPC There were advantages in the HIPC, but many people believed that it was not fully formed and was too discerning in its decisions as to which countries should be permitted this debt relief. The HIPC had to evaluate each country and examine its external debt to decide whether its debt was sustainable. However, the HIPC only took into account one factor to decide whether the debt was sustainable, making countries ineligible. Also, some of the changes made to the country were not very drastic, thus not improving the financial situation very much.

Current Worldwide Debt Situation In 2010, a report was made by ECLAC (Economic Commission for Latin America and the Caribbean). The report was about the world’s financial situation after the economic crisis. Between 2008 and 2009, export levels around the world dropped by 30%. Despite this, developing countries look less time to recuperate from the crisis. This has aided in other countries around the world recovering from the crisis. Asia began the restoration of the economy, and places such as Latin America and Africa were guided by Asia’s restoration. Not all countries, however, have dealt well with the crisis. Countries with unsustainable debt have not been able to recover from the crisis and get back their economies from before the crisis.

Global Action In the year 2000, the United Nations created the Millennium Summit, which was a discussion among different countries in order to form goals for the United Nations to follow for the next century. Because of this summit, Millennium Development Goals were created and the Millennium Declaration was signed. This Declaration has objectives for the UN to reach in the 21 st century. The goals were made to be attainable.

Millennium Development Goals These goals were: eradicate extreme poverty and hunger achieve universal primary education promote gender equality and empower women reduce child mortality improve maternal health combat HIV/AIDs, malaria and other diseases ensure environmental sustainability, and develop a Global Partnership for Development. However, progress has not been as quick as it was expected. Financial aid has decreased in the past few years.

International Action The General Assembly of the United Nations has been active in in trying to solve the international debt problem. The World Bank has also been tackling these problems by creating goals to combat these issues.