Class Notes (835,307)
Canada (509,086)
York University (35,229)
POLS 3560 (15)
all (15)
Lecture

lecture_10

3 Pages
125 Views
Unlock Document

Department
Political Science
Course
POLS 3560
Professor
All Professors
Semester
Winter

Description
The Global South: Politics, Policy & Development POLS 3560 – Fall/Winter 2011/2012 – Ananya Mukherjee-Reed Lecture 10 – Debt Crisis: Dissolution of the Nationalist Model – Nov 22 Debt: Main Questions - What is debt? - What is the debt crisis? - How did it begin? - How does it affect different groups of people? - How does it affect ‘development’? - What is debt forgiveness? - Concept of Odious debt. What is going on in Ireland? - The poorest 48 countries have debts totalling US $168 billion, whilst for the poorest 128 countries; it is over US $3.7 trillion. - The total external debt of the very poorest countries was US $168 billion in 2008. - During 2008, these countries paid over $8.3 billion in debt service (payments of interest and principal) – over $23 million a day. If you include India and Pakistan, the figure would be closer to $116 million. - For all ‘developing’ countries, total external debt owed in 2008 was $3.7 trillion and over the course of that year they paid $602 billion servicing these debts. - Haiti ‘owes’ $891 million. International Monetary Fund (IMF) and World Bank - Lend poor countries money to pay interest on original loans. - But the strict conditions are o Reduce spending on education, health, housing. o Increase exports to get $ o Increase taxes. For a country to repay its debt easily, it requires: - Low interest rates on its debt. - Exports. - None of these conditions were met by the policies of the 1990s. 1976 – 1983 - Debt crisis 1982 erupted shortly after US monetary policy raised interest rates. So the borrowers (private and public-owned companies) failed to put the borrowed funds to work to earn a return higher than the interest rate on the funds. - The solution ‘recommended’ by the IMF/WB, using its power of intimidation was to nationalize the private debt, which means that the state = the population, assumes the debt of the private sector. - Result: massive transferring of the burden of debt to the vast majority of the population. Debt Trap during the 1990s - Creditors imposed conditions that condemned the debtor (the population) to be always a debtor (i.e. much higher interest rates than those of the 1980s). - Then, the debtor needs to assume more debt just to service interests. - The result: debt became perpetuated (in Argentina, rising 12.5% annually between 1991 and 2000) because its servicing disables the possibility of cancelling it. - Debtor becomes more
More Less

Related notes for POLS 3560

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit