Should Rich Countries Forgive all Debts for Poor Countries?

Poor countries borrow money from rich countries to finance projects that help the citizens have a decent standard of living. Some of these projects, such as food and petroleum subsidies, are not income generating, so the need for money just increases leading to more borrowing (The Economist, 2005). Due to this fact, the money the poor countries owe the rich keeps increasing. To add insult to injury, the rich countries also charge interest on these loans.

Problems in the poor countries will not come to an end and it will result to more borrowing (Mutume, 2005). Once the poor countries generate money, it all goes repaying the loans and the ever increasing interests instead of financing projects that will make them generate more income. This means the vicious cycle of poverty continues, they remain poor and the rich countries become richer.

Since the rich countries have more money to sustain their nationals even during hard economic times such as inflation, they should consider forgiving the poor countries the existing debts. The rich countries should then go ahead to invest in these countries. These investment projects will employ the nationals of the poor country. This way, more jobs will be created in the poor countries and the issue of subsidies will not make the poor country borrow money but instead they will borrow money to finance projects that will generate income and be able to pay off the debts while at the same time developing.

The rich countries have in some way contributed to the problems that make the poor countries borrow from them. For instance the environmental hazards, such as drought and famine, which strike the poor countries, are brought about by environmental pollution by the rich industrialized countries (The Guardian, 2008). It seems as if the rich countries have become richer at the expense of the poor countries. Thus, the rich countries should treat this debt relief as a moral responsibility that will reduce the gap between the rich and the poor countries, and thus the poor countries will move from depending on international loans to being independent.