- Outline the meaning of foreign debt and explain why countries borrow from foreign creditors.
- Explain that in some cases countries have become heavily indebted, requiring rescheduling of the debt payments and/or conditional assistance from international organizations, including the IMF and the World Bank.
- Explain why the servicing of international debt causes balance of payments problems and has an opportunity cost in terms of foregone spending on development objectives.
- Explain that the burden of debt has led to pressure to cancel the debt of heavily indebted countries.
We are first going to watch the documentary "Life and Debt" by Stephanie Black. See here for details. It's extremely relevant to this topic.
Then download this and complete:
Recent article on IMF blog: Managing Debt Vulnerabilities in Low-Income and Developing Countries