Debt Cancellation and its impact on poverty in developing countries PowerPoint Presentation

Debt Cancellation and its restore on distress in developing countries - PowerPoint Presentation ExampleThe paper tells that debt sculptural relief or debt kindlecellation is partial tone or full forgiveness of debt from developed countries to developing or poorest countries. Organisation for Economic Co-operation and Development noteworthy that debt service payments in hard currency in fact scarce domestic elections from major key investments such as in health and development and thus cause scantness as well. Debt relief is thus an integral part of the efforts taken by international community to reduce poverty worldwide. In 1996, ball Bank and International Monetary Fund took initiative for Debt Relief whereby Heavily Indebted execrable Countries (HIPC) will get faster, deeper and broader debt relief. This agreement was designed with a view to make these countries introduce measures to reduce poverty in these countries. By 2005, The Multi subsequental Debt Relief initiativ e was agree to provide 100 percent cancellation of IMF, World Bank, African Development Bank and Inter American Development Bank for all those countries that project unblemished HIPC initiative. The HIPC initiative has been aiming to provide debt relief to 40 most poorest countries, with a condition that all these countries must wear high level of poverty and unmanageable levels of debt. In order for a country to be in line for debt relief, it is required to demonstrate World Bank and IMF that it has plans to reduce poverty in the country. The HIP countries later have shown sincere commitment to put sound macroeconomic policies with a view to reduce poverty. ... 269). The HIP countries later have shown sincere commitment to put sound macroeconomic policies with a view to reduce poverty (IMF and World Bank, 2001). The main purpose of HIPC initiative and debt relief was poverty reduction, and this has been found to be highly effectual for many countries. The debt relief or debt c ancellation to poorest countries has been found to be an effective way to improve health and study in the country and thus to reduce poverty. Figure given below illustrates that spending on education and health as improved due to the HIPC debt relief. Lala, Ranganathan and Libresco (2006, p. 6) observed that debt relief was becoming an ongoing mechanism for resource transfer so that the country can free up resources for poverty reduction purposes. It is generally agreed that debt relief to poorest countries has caused improvements in health and education spending due to resources transfer and as a will poverty has been reduced in the poorest countries. But, it is also argued that it may not be the same in the incase of developing countries. Cancellation of Developing Countries debt and poverty problem It is argued that debt relief or debt cancellation owed by developing countries may allow for to reduce poverty since these countries will be able to adopt domestic policies and st rengthen institutions to take advantages of world-wide markets, which in turn help them increase the share of trade in their GDP. As these countries gain debt relief, they can participate in globalization by exporting to or importing from other countries and thus to be able to maintain favorable balance of payments. These countries also would