The causes of the current debt crisis are complex, rooted in economic policies and development choices dating back to the 1970s and 1980s.
Mismanagement and corruption on the part of debtor countries; irresponsible or unwise lending by banks, governments, and international institutions; and complex and often unanticipated changes in the global economy have all contributed to the current debt crisis.
Fluctuations in the world prices of commodities can destroy the economy of a country that depends largely on a few products, such as coffee and copper, for its income.
The volatility of international capital flows contributes to instability in foreign exchange markets and can leave a country financially devastated.
Misguided or inadequate development programs have left many countries impoverished and saddled with a heavy burden of debt.
Furthermore, such financial instability can wreak havoc on the political stability of fragile democracies, particularly those emerging from years of civil conflict.
Focusing attention on international debt is especially appropriate as we prepare to celebrate the Great Jubilee Year 2000. The Jubilee Year 2000 can be a time for a new beginning for impoverished nations and an opportunity to reestablish relations of justice by finding a solution to the problem of international debt.Overcoming poverty and inequitable development will take more than debt relief.It will require private and public investment, foreign assistance, fair trade, better-monitored and regulated flows of capital, economic policies that favor growth, government decision making that is accountable and open, and the growth of a vibrant civil society in developing countries.For example, Ethiopia spends four times more on debt service repayments than on health care, yet 100,000 children die each year from easily preventable diseases.In Tanzania, debt service repayments were equivalent to nine times the government's spending on primary health care in 1997, yet almost a third of the population dies before reaching the age of forty. These are the serious wounds that Zambians experience because of debt and the demand for debt servicing. In most cases, those who bear the burden of repaying the debt had no voice in the decision to borrow and did not benefit from it; in some cases, the borrowed funds were wasted, used for extravagant activities, or even stolen by unprincipled officials.