The Debt Crisis of the Eighties and Nineties Essay -- Economy Economic

The Debt Crisis of the Eighties and NinetiesThe debt crisis of the 1980s and 1990s has been one of the largesteconomic disasters of the 20th Century. It has ca apply widespreadpoverty, famine and starvation across many an(prenominal) of the third worldcountries it has touched. The Crisis did not go by unnoticedhowever. Since the mid 1990s world governments have awoken to thehorrible reality that such debt causes with attempts to lighten the annihilating affects with such programs as the Brady plan, HIPC andeventually HIPC 2. While these plans have had only limited successthe question of weather the debt crisis can be solved in the unyielding runis still to be answered.The debt crisis as it is now called did not occur in one single eventinstead it developed as a slow moving chronic syndrome1. Theprimary crisis, which occurred in Mexico in 1982, was centred onmiddle-income nations2, while the second strain occurred in poorerAfrican nations, with the effects from it still organism wel l and trulyfelt today3. For these countries the need for industrialisationmeant the need for large-scale dramatizeing. Since many of the Africannations were excluded from being aloud to borrow until the early1960s, the need to borrow a lot, quickly, was a common trendthroughout the developing nations4. The reasons for the colossalamounts of debt cannot be simply explained for they vary from coun submitto country. Some nations had corrupt militaristic governments whocared much for themselves than for their people5. While othersstruggled with failed projects and damaging economic decisions6.By the early 70s the debt had begun to accumulate. The impoverishedand debt stricken countries began to shift commodities meant for thesustenance of the people to the export sector to try and make enoughmoney to pay off their debts. Suddenly all the indebted countrieswere simultaneously selling their primary commodities on the worldmarket. The flow of coffee, coca, copper, steel, ect, had the ann ihilating effect of lowering the commodity prices causing thedeveloping nations to make much less than they had previously.Countries now had to sell two or three times what the used too to makethe same money7. Combined with the rising and falling of thedollar, and the rises of interest rates in the 80s, the third worlddebt was now even larger than ... ...continue in thelong run many of HIPC goals will be achieved.Success of HIPC and the debt cancellation plans of the 90s are indeeddifficult to judge. If success were to be measured by how much hasbeen paid out from the forecasted amount then HIPC could be viewed asa failure. However if success were judged on the increase of socialservice expenditure then yes HIPC would be seen as a successfulinitiative. The one clear success of the debt cancellation plans hasbeen public awareness. Though the cancellation process is movingslowly and only achieving a fraction of its goals18 the generalpublic of the world has now awoken to the horrors that debt can leadto. With public support behind the debt cancellation process the debtcrisis will eventually be overcome.---------------------------------------------------------------------1 La Trobe, Assignment Manual, p.1302 Ibid3 Ibid, pp.130, 1314 Ibid, p.1335 Ibid, p.1316 Ibid7 Ibid, p.1378 Ibid9 lecture10 Ibid, p.144, 14511 Ibid12 Ibid13 Ibid, p.14914 Ibid, p.15215 Ibid, p.15616 Ibid17 Ibid18 Ibid, pp. 150-153