Frequently asked questions

• Which country owes most money? Surprisingly it isn’t one of the poor countries. It is in fact the USA. However, because the USA earns lots of money, the debts are not a problem for them. (Imagine you had a really well paid job; you might borrow money to buy a house or a car. You would be in debt, but it wouldn’t matter because with your income you could afford to pay your debts and still have money left over for food, entertainment and anything else you wanted. You would be like the USA. Suppose you lost your job however; you would no longer be able to pay your debts and your bills. You would be like the world’s poor countries.)

• What would happen if the rich countries and the IMF simply cancelled the debts owed directly to the United Kingdom? Although the total amounts of money may seem huge to you and me, and to the poor countries, they are in fact very small if you compare them to the wealth of the rich countries. The debts of Sub-Saharan Africa amount to just 1% of world trade. It has been estimated that to pay off all the debts that the 41 poorest countries owe to Britain would cost each person in Britain just £2.00.

• How can we know that if the debts are cancelled poor people will benefit? It is possible for the rich countries to insist that if debt is cancelled that the money will be spent on things like health and education, and not on weapons or luxuries for the country's leaders. It is possible to set up monitoring schemes to check that the spending is going to the poor.

• Surely it is morally correct that people should have to pay their debts? That's a good point, but many of the indebted countries have in fact paid back what they originally borrowed and a lot more - it is the interest that has been added to the loan that they are struggling to pay. Some of the money was stolen by corrupt politicians who are no longer in power - is it fair that the poor people of these countries should now be forced to pay back money they never benefited from? Which is the greater moral wrong, failure to pay debts or people dying from poverty?

• If the debts were cancelled this time, what's to stop the poor countries borrowing more money and getting in debt again? At the moment nothing! Campaigners say that it is important not only to cancel the debts but for the rich and poor countries to get together and come up with ways to better organise the global financial system. It is important to find ways in which poor countries can work their way out of poverty, with help from the rich countries if necessary, without getting into unsustainable debt again.