PO111 Chapter Notes -Heavily Indebted Poor Countries, Poverty Reduction Strategy Paper, United Nations Development Programme

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Published on 22 Apr 2013
School
WLU
Department
Political Science
Course
PO111
Professor
1
The role of debt and poverty plays a very seemingly unimportant role when it comes to global
politics because all the mission of many high powerful states is to help the world but by helping the
world benefit your own state. By doing so it creates certain organizations like the United Nations,
World Bank and International Monetary fund to try and provide states with loans to help build their
state.1 In order for to help provide for global inequity many states have to concur with their actions to
act within the state of need. Also there has been other such corporations that states want to invest into
therefore having to take money and help away from the less-developed countries which does not help
reduce poverty by any means and these corporations are known as Nongovernmental
organizations(NGO) and Multinational Corporations(MNC).2 It is disgusting to think how poor of a job
the high powerful states have done in trying to reduce debt and poverty in many less-developed
countries plus at the same time in doing so fail to recognize the importance of stopping poverty in other
states. By examining where money is put towards and how slowly international responses are being
enforced, it shows that poverty and debt could be solved a lot faster if high economic states focused
more on less-developed countries instead of other corporations in order to benefit there own state more.
It is humorous to think that realistic believers sure could prove their point about how states are
governed when they examine how states handle their international duties. While there is such
organizations as the World bank and IMF how could they be so up and down with loaning out money
and how the United Nations have made few goals relative to reducing poverty. IMF and the World
Bank have made many mistakes and therefore see many states in debt to them which means are
pressured by them to pay their foundations of what their terms were when they made the agreement.
The overall picture is that there is more efficient ways for these corporations and foundations to
succeed, there just needs to be more demand for solving poverty at the international level. In essence
1 Sens, Allen Gregory, and Peter John Stoett. Global politics: origins, currents, directions. 4th ed. Toronto: Thomson
Nelson, 2005. Pp.301-305
2Ibid at Pp.296-297
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states at the international level needs to take a idealistic approach to their problems instead of seeming
very realistic when it comes to certain agreements within amongst each other, it will lead to benefits for
everyone if we can eliminate debt and poverty in the world.
When it comes to debt, a numerous amount of poor countries spend twice the amount of money
paying back debt then on their own healthcare and education.3 The idea of debt cancellation has
occurred but people are worried that leaders of these poor countries will benefit themselves with this
money and not put it towards funding the poorest people. Therefore some poor countries have set up
separate funds to channel money freed by debt relief towards poverty reduction which is a great method
in eliminating poverty.4 In these certain countries there has been remarkable evidence showing that debt
cancellation and if you put the money in the right direction there will be positive outcomes. The
international leaders should force other states to follow these certain cancellations in how they are
managing their debt.
To start off what has the the world done at an international level to help reduce debt and poverty
around the world especially in less-developed countries. The IMF and the World Bank are the main
lenders at the international level for providing debt relief for developing countries and were created in
the 1950's after World war two5. In 1970 poor countries started to borrow heavily off of the World Bank
then in 1982 the beginning of the Third world debt crisis. Overall the 1970s and 80s there was a severe
increase in the lending of the IMF and World Bank plus these loans to poor countries came with
restrictions.6 It then became to much and both organizations were falling over each other handing out
new loans and the whole time assuming economic powers. In 1996 the Heavily Indebted Poor
3"Debt relief | Make Poverty History." Make Poverty History. Marc Purcell, n.d. Web. 16 Nov. 2010.
<http://www.makepovertyhistory.com.au/debt-relief/>
4 Shah, Anup. "Debt Cancellation and Public Pressure â Global Issues." Global Issues : social, political, economic and
environmental issues that affect us all â Global Issues. N.p., 9 July 2005. Web. 16 Nov. 2010.
<http://www.globalissues.org/article/36/debt-cancellation-and-public-pressure>
5 Sens and Stoett. Supra at Pp. 137-142
6 Shah, Anup. "Causes of the Debt Crisis â Global Issues."Global Issues : social, political, economic and environmental
issues that affect us all â Global Issues. N.p., 3 June 2007. Web. 16 Nov. 2010.
<http://www.globalissues.org/article/29/causes-of-the-debt-crisis>
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Countries(HIPC) was launched with the mission to ensure no poor country faces a debt burden it
struggles to manage.7 Since the launching of the Heavily In-debt Poor Countries the international
financial community, including multilateral organizations and governments have joined together to
reduce levels of external debt troubles from the most heavily indebted poor countries. What people
don't realize is that these two organizations are actually causing more and more poverty especially in
Africa although these organizations are suppose to reduce poverty, the programmes they induce cause
more poverty problems.8 The IMF and World Bank need to realize they are not providing a positive
outcome for less-developed countries so they need to make adjustments. They introduced the Poverty
Reduction Strategy Paper(PRSP) approach in 1999 and these Poverty Reduction Strategy Paper's
under-mind the Heavily In-debt Poor Countries initiative and the lending of new loans by the IMF and
World Bank.9 This is the only reducing poverty plan they have brought to the table and it needs to be a
more serious problem for the IMF and World Bank in order to help the international level in many
areas. So why is the IMF and World Bank causing poverty to increase and the conclusion is that
Structural Adjustment Policies(SAPs) which control poor countries to ensure repayment on debt and
economic restructuring.10 Instead what has happened is that poor countries have to focus on repayment
and other economic policies instead of focusing on health, education and development. Also the
Heavily In-debt Poor Countries initiative is not working the precise way they expected it to and it is
actually acting the complete opposite and helping the rich countries instead. The problem with the
Heavily In-debt Poor Countries is that there are conditionality on certain loans which was one of the
7 "Factsheet -- Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative."IMF -- International Monetary
Fund Home Page. N.p., 30 July 2010. Web. 16 Nov. 2010. <http://www.imf.org/external/np/exr/facts/hipc.htm
8 Shah, Anup. "The Heavily In-debt Poor Countries Initiative is Not Working â Global Issues." Global Issues : social,
political, economic and environmental issues that affect us all â Global Issues. N.p., 30 Aug. 2001. Web. 16 Nov. 2010.
<http://www.globalissues.org/article/31/the-heavily-in-debt-poor-countries-initiative-is-not-working>.
9 "Poverty Reduction Strategy Papers (PRSP) - All Documents Sorted by Country ." IMF -- International Monetary Fund
Home Page. N.p., 29 Oct. 2010. Web. 16 Nov. 2010. <http://www.imf.org/external/np/prsp/prsp.asp
10 Shah, Anup. "Structural Adjustmentâ a Major Cause of Poverty â Global Issues."  Global Issues : social, political,
economic and environmental issues that affect us all â Global Issues. N.p., 20 Feb. 2010. Web. 16 Nov. 2010.
<http://www.globalissues.org/article/3/structural-adjustment-a-major-cause-of-poverty>
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Document Summary

By doing so it creates certain organizations like the united nations, It is humorous to think that realistic believers sure could prove their point about how states are governed when they examine how states handle their international duties. While there is such organizations as the world bank and imf how could they be so up and down with loaning out money and how the united nations have made few goals relative to reducing poverty. Bank have made many mistakes and therefore see many states in debt to them which means are pressured by them to pay their foundations of what their terms were when they made the agreement. The overall picture is that there is more efficient ways for these corporations and foundations to succeed, there just needs to be more demand for solving poverty at the international level. 1 sens, allen gregory, and peter john stoett.

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