Debt relief

• explanation

  • many LICs borrowed money to develop their economies during the 1970s and 1980s
  • some of these countries have fallen into serious debt and are unable to pay back these loans because of high rates of interest
• example

  • In 2006, the international monetary fund agreed to cancel the debt of 19 of the world's poorest countries
  • this money saved in debt can now be used for development projects such as industry, resources and infrastructure
  • but corrupt governments may keep money
  • example: Ugandan government has spent money to provide safe water to over 2 million people