UNCTAD
Debt Relief
International debt relief is the movement of the more affluent nations of the world to relieve the heaviest debt which weighs on many impoverished countries. Freeing these countries from their heaviest debts is meant to ensure that they never have to deal with an unsustainable external burden and to provide them with more free capital to spend on other vital projects such as fighting poverty and providing necessary services to their citizens. Without relief of external debt, many impoverished nations are unable to spend enough on education, health care and infrastructure; carrying external debt can inhibit a government's ability to act for the benefit of its people, and debt relief is one proposed solution to the quandary in which these governments can find themselves.
In order to receive debt relief from the international community, countries must first fulfill certain conditions. They must have already been eligible to receive money from the international community as aid and face an insurmountable debt burden which could not be otherwise resolved through more traditional mechanisms. They must also have a sound track record of reform and sensible action in government in order to ensure that the relief provided will be well utilized. Along with this, the country must also have a poverty reduction strategy in place. After these are accomplished and the country receives the needed debt relief, they must satisfactorily accomplished the goals earlier set out, such as preserving the country's stability and improving the delivery of basic services and improvement of governance.
There is much debate about which countries legitimately qualify for this type of assistance and whether or not there should be conditions attached to the debt relief. The most effective way of carrying out debt relief is also much debated, along with the issue of which countries should be responsible for relieving the debt burden of the impoverished countries.
Critics of international debt relief say that this system leaves impoverished countries dependent on the Western hemisphere, encourages economically unsound decisions and punishes developing countries that have no debt. The money freed up by debt relief may not always go to the legitimate projects it was intended for, and the everyday citizens may not benefit from the international assistance. The United Nations must analyze the program and decide whether it needs to be changed or modified in order to better benefit the world.