Debt Hinders Development of Poor Countries Essay

The economy of the c first gearnish is also undermined since all the sectors of the economy including health sector, education sector, agricultural sector, tourism sector and other sectors ar compromised for the kingdom to repay pole the debts. 2. Its leads to low capital stock This is experienced repayable to regular payments of debts by the developing countries. Low level of investments, low outputs from the industries and farms, low savings are also experienced due to repayments of loans.A body politic fails to save any silver for use in profitable projects junior-grade or no capital is accumulated for suppuration purposes. A awkward fails to attract F. D. Is i. e. foreign direct investments which could bring about development processes. These investors trim their investments in these poor countries and transfer them to safer countries hence causing capital flights. 3. Debt leads to inflation. This is the planetary rise in price of goods and services in a commonwealt h. The money borrowed may exceed the supply of goods and services hence causing inflation.If a debt is not managed properly then it will affect the whole country and its employment systems. These leads to loss in stability in real regard as of money and other monetary items. It discourages investments of savings and shortages of goods if the consumer begins hoarding out of meet that prices will increase in future. 4. Weak currencies. When a nation has a bigger debt the economy grows slowly or totally stagnates. These poor nations are asked by their trading partners to devalue their currencies to make their goods cheaper for them to buy.Devaluation of a countries currency affects the production sectors since the prices hasten fallen hence making it less worth to buzz off because the currencies of the countrys exports are weak. This leads to continuous repayment of loans since the poor country cannot access the internationalistist markets with their weak currency hence cannot play the hard-fought currencies. 5 . Debt hinders trade. Most of the highly indebted poor countries are gift with raw materials and other resources.Due to this presence of inbred resources they have benefited from the international trade partners. So due to loan binge of the excessive debt on the poorer countries the trading partners and trading blocs shy away since they do not motivation to be associated with a highly indebted country. This leads to slow economic outgrowth and development of the country since they have to trade with countries with the same features and therefore and they cannot get a lot of finances. Most of these products from developing counties are exported to developed countries.So when these poor nations are faced with high level of protectionism in the international markets they experience a sharp reduction of exports leading to unfavorable ratio of payment. The developed or trading countries bring up /erect protectionist laws communicate of tariffs qu otas, or standard of goods hence locking out most of the elemental exports from the poor countries from accessing international markets. 6 . Debts and environment. Environmental issues, poverty and debts are in truth much related. This is because the to a greater extent the developing countries stay.Developing countries stay in debts, the more they will feel that they need to exploit the earth or natural resources for the hard cash they bring in. the poor countries also have to hop-skip back on its social, health, endowment, conservation, employment and other important programs, cutting back on all these issues means the country will not execute development process. These are main pillars of any development process to advance. The countries development will stagnate since all the sectors necessary to steer forward have been cut back.