Why are some countries in debt?

why are more than or lesswhat countries in debt? What impact does it make on discipline?What is debt?On an international scale, debt is the owe of funds from one estate to another or an international organisation as a depart of previous borrowing beca wont of need.Why are some countries in debt?Countries can be in debt for diametric reasons1) Trade deficitWhen a pastorals imports are worth more than a boorishs exports, the region loses notes and so it is forced to borrow silver from other countries or international organisations to try and cover the losses.2) Natural disasters and level(p) aidAfter a natural disaster, a country may become dependent on the aid of another country for a mulct period of time. However sometimes the aid effrontery is tied aid where the country receiving aid may have to brook back the notes given(p) (possibly with interest). They are on that pointfore in debt to the donor country/organisation.3) Money mismanagementIf a country mismana ges their use of money (most likely through the government) and spends money unnecessarily while taking issue contributes to cover the cost, the country can end up in debt.The offspring of debt on developmentWhen a country is in debt, a majority of the money it gene grade is used to pay back money to the donor country. This means that there is little money being invested into the social home of the country, so healthcare and teaching method levels remain the very(prenominal) or get worse overall retard down or sometimes even revert ontogeny a country as literacy rates may fall and not complete money could be invested in improving healthcare.Ways of solving debt problemsCancelling debt What are the advantages and disadvantages?Advantages The advantages of cancelling debt are that it can allow a poor country to start investing the money it gains into its development/ social infrastructure rather than remunerative back debt to developed countries. This can overall uphold to fight poverty and reduce the development gap. In 2005, Zambia had $4 million of debt cancelled and in 2006 it had enough money to pay for free healthcare for millions of hoi polloi living in rural areas, improving the select of life.In Tanzania, money saved from debt cancellations allowed the government to eradicate primary school fees in 2001. As a result, the number of students that go to primary school doubled. These examples learn that by cancelling debt, it allows money to be invested in education which can lead to more people get jobs, overall contributing to a countrys economy, improving the gross domestic product and by investing in healthcare, the life prevision and infant mortality rate can also decrease.Summary-a country can invest in its development-It reduces poverty and can reduce the development gap-examples include Zambia and TanzaniaDisadvantages Although cancelling debt can help a country to develop, there are also some disadvantages. Firstly, the donor country loses a significant heart and soul of money which can slightly damage its economy. ontogeny countries which have had their debt cancelled could start taking out more loans, in the hope of having debt gained from that cancelled as well (This however is unlikely as last developed countries willing eventually see when a country is not worth giving money to and in a time of crisis, nothing will be given) When a loan is taken, the money should be overhauled and if it is not, it could give the country which did not pay back, a bad reputation.Summary The donor country loses money Countries could take out more loans A loan should be paid back if taken in the premier placeDebt for personality swapsDeforestation mostly takes place for economical needs of a country to try and pay off debt. A debt for nature swap is an agreement between a developing nation in debt and one or more of its creditors. In a debt for nature swap, the country or organisation owed money, writes off an amount of debt in return for a certain amount of environsal protection. They were first established in the 1980s in the endeavor of solving two problems with one agreement 1) to defame the debt of developing nations and 2) to minimize the environmental destruction that often takes place in developing countries.A political party called WWF (world wide fund for nature) which cooperates with countries such as UK and the States has helped to structure and design many debt for nature swaps. In 2008 they helped to structure and facilitate one of the largest debt for nature swaps in Madagascars history in which 20 million dollars was commit to preserve the countrys rich biodiversity. Also in 2008, the regular army reduced Perus debt by $25 million in exchange for conserving its rainforests.Debt for nature swaps are extremely upright because they not only cancel the debt of a country allowing them to invest in development, but it helps to protect the environment and conserve some of the worlds rainforests. This makes it better than just cancelling debt.