This paper analyses the current levels of the state debt in the least developed countries (LDU). International debt has become a major issue for many of the world’s poorest nations. It is argued that the debt presents one of the main stumbling blocks to LDCs’s social and economic development…
This paper dedicated to the problem of the unsustainable external debt and its repayment in in the least developed countries (LDU), which is considered an impediment to their economic growth and development.
The report by the UN found out that there is a high probability that any LDC that exports primary commodities has an unsustainable external debt and that there is a close association between falling and volatile commodity prices and unsustainable external debt. The debt problem of commodity-exporting LDCs is rooted in the low level of domestic resource mobilization, low rates of return on investment, the vulnerability to external shocks and slow export growth. For debt sustainability to be achieved, the rate of growth of exports must be greater than the rate of interest on outstanding debt.
Although high levels of debt can depress economic growth in low-income countries, external debt slows growth only after its face value reaches a threshold level estimated to be about 50 percent of GDP.
A major challenge LDCs face is ensuring that a reasonable resource level is allocated for debt servicing to avoid the risk of default and to maintain conducive relations for debt relief negotiations with its debtors
Governments must make efforts to stabilize commodity prices, perk up their levels of domestic resource mobilization, increase rates of return on investments and raise export growth, and finally protect themselves from external shocks. Debt reform not only includes maintaining a manageable level of debt but also decreasing corruption incidence in LDCs, allocating a reasonable resource level for debt servicing to avoid the risk of default, without sacrificing than they can afford to invest in basic health care or education. ...
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This work highlighted that debt is not the prime reason for poverty and debt cancellation cannot cause poverty reduction unless there is economic reforms and efforts from the governments to utilize these as a resource to improve health and education spending. Developing countries are facing poverty issues due to factors such as poor managing of resources, corruption etc. in order to reduce poverty.
29). Government debt can be classified into two categories namely the internal and the external (Chamberlin and Yueh 2006, p.86). Internal debt refer to the amount of funds collected within the country from local investors and government run institutions such as pension trust fund.
The debt crisis is an issue of major concern for any less developed or developing country. Generally these less developed countries have to borrow money from different leading countries or the private banks or World Bank for their growth and economic sustenance.
It is year 2007. It is time for "communities of salt and light"2 to once more read the signs of the times, to see, to reflect, to judge and hopefully to act for their global brothers and sisters, using the social teachings of the Church as anchor and guide.
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In a sense, economic development is the creation of wealth for all people so that citizens can have access to increased standard of leaving. It can be measured by job creation, increase in taxable basis and economic
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In other words, fiscal deficit will put each citizen of a country indebted to some external financial sources. Thus even the new born babies are indebted to somebody even from the beginning of their life on earth. It is essential for a government to
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