African Debt Crisis

Only available on StudyMode
  • Download(s) : 127
  • Published : May 6, 2013
Open Document
Text Preview
In order to catch up with the fast growing progress of the developed countries' economy, a lot of developing countries choose to use debt to accelerate the development of their economy. But who else can know this is a way that Western countries use debt to control the economy of the poor countries or developing countries.(Global) The debt crisis has spread across Africa in the last decade and the reasons that gave rise to excessive African indebtedness in the 1970s and early 1980s, and which caused it to balloon from $140 billion when the crisis emerged in 1982 to over $270 billion in 1990, has been amply documented elsewhere.(Revisited) Global apartheid, also is one of the reasons that caused African debt crisis. Global apartheid manifests itself in many different ways. Its attributes go beyond racial discrimination to include the use of unfair trade, the debt crisis, gender inequality, and religious and political intolerance as a way of enshrining its perpetuation. Also, an obvious situation about poverty in Africa can be seen from 'The ten poorest countries Of The World'. All of them are from Africa.(Top poorest) African people think debt is an easy way to get money and help their economic development. However, they never think about the debt will burden their economy. African debt is a double-edged sword that is used by most of the African countries. Though it is a speedy way to get away from poverty, it can hurt the economy a lot even the economy will be much worse than before. In order to know how to help Africa get rid of debt crisis, people should know its causes, scale, impact and solution. This will let people do their best to help Africa. When people heard this astonished truth, they always curious about what exactly causes the African debt crisis to happen. Causes of the African debt crisis can be easy to divide in three parts: a continuing legacy of colonialism, global apartheid and mismanaged lending. The colonisation of Africa has a long history, the most famous phase being the European scramble for Africa during the late 19th and early 20th century.(Textbook) During this time, colonizers were doing the slave trade and establish the company. They borrowed money from outside of Africa. And this is how debt start in Africa. After the decolonization of Africa, a lot of newly formed states appeared. Nevertheless, before these newly formed states had even had time to organize their economies and get them up and running, new debtors were already saddled with a heavy burden of debt. These new formed states did not have enough money to pay for the debt. So they borrowed the money to pay for the debt, as well they were going to extreme poverty and the debt crisis. Global apartheid, which uses debt as a form of bondage, fuels cycles of poverty and plagues many impoverished countries in Africa. In apartheid South Africa, the white minority had the final say over all matters, using different rules for different races and colors. Today, the West ultimately has the final say in the majority of Africa's issues and policies, utilizing the continents $300 billion dollar debt as the mechanism by which to impose its dominance. When poor countries become deeply indebted, they fall into an abyss of economic degradation. It is not just the debt that is an issue for poor countries; it is the harsh conditions that come with it, that for years, have been known to make things worse, not better. The scale of African debt crisis is becoming bigger and bigger. It affects people’s lives, food production and also it increases the death rate. In 1970, the world’s poorest countries (roughly 60 countries classified as low-income by the World Bank), owed $25 billion in debt. By 2002, this was $523 billion for Africa. In 1970, it was just under $11 billion by 2002.(Shah, The Scale) The scale of African debt crisis is not only becoming bigger in economy part, but also the quality of lives. Extrapolating from UNICEF data, as many as...
tracking img