Debt is a major cause of poverty and hardship in the developing world. Every day debt repayments take much needed resources away from the health and education sectors in indebted countries.

The debt burden is denyng children access to their basic human right of a decent standard of living and adequate nutrition.
But the debt crisis arose through no fault of the people that are now suffering under its burden

BACKGROUND TO THE DEBT CRISIS
In the 1970s. The oil producing countries form a cartel and push up oil prices
They make a fortune and stick the money in Western Banks.
   


Not surprisingly, the money is often spent on under-researched, unrealistic projects or wasted by dictators. The poor rarely benefit from the loans.
Flooded with cash, the banks set out to use this money to make more money by pushing loans on any country they can persuade to take one.
   
Then...disaster! New economic policies in the West send world interest rates sky high.
Even more disaster! The prices of things poor countries buy (eg oil) rise a lot. and the prices of things they sell (eg crops) fall...alot.

   
The International Monetary Fund (IMF) and the World Bank stepped in and offered countries like Mexico new loans to pay off old the old loans.These new loans however came with strict conditions where governments were forced to spend less on their people in order to pay the debt.
In 1982, Mexico declared that it was unable to repay its debts. Mexico owed vast sums of money to banks in the America and Europe and default posed a serious threat to the stability of the international financial
   
 
The new loans were eaten up in interest repayments and so countries got further and further into debt and today many of the world's poorest countries are even deeper in debt despite having paid off the original sums many times over.