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International Debt - Coggle Diagram
International Debt
Reason for Existence
profitable for the lenders
to cover the deficit
Saudi Arabia after Yemen war
The U.S
for economic and social development
to build a new infrastructure
to improve education
Economic Results
financial crisis
The Great Recession 2009
1980 recession
lending countries force
the borrowing countries to follow their ideologies
countries unable to repay debt
countries must cut social spending to pay their debts
economic embargo
take another loan with a higher interest rate
History
started 700 years ago
become common in 20th century
increased fast with newly-independent African nations after 1950
Overall Consequences
for the lending country or countries
gain Access to natural resources
gain locations for military basis
economic growth in their financial sector
for the borrowing country
support for dictatorships
buy weapons to secure power
spend heavily on the dictator's inner circle
sometimes spending money on unsuitable mega-projects like dams
Organization ( IMF and World Bank )
always led by Europe and The U.S.
The money that government borrows from another government or private lenders